Concern of Increase in Interest Rates Spurs Seller's Market

Posted by Dan Wolf on Tuesday, September 2nd, 2014 at 5:30am.

                                              

Whether Interest Rates go up or not within the next year, the fear of double-digit rates is propelling a seller's housing market in Anchorage, Alaska and around the country. Buyers who have been sitting on the fence may want to buy to lock in the historically-low rates.

According to a recent article by The Mortgage Reports, mortgage rates are still half the 30-year historical average of 8.375 percent. Many people who are 50 or older may remember double-digit mortgage rates in the '80s that kept many people stuck in their home for fear of losing their more reasonable Interest Rates.
•    Buying a forever home

Buyers are under more pressure now to choose a home they can remain in for the long term. If home prices or Interest Rates do rise dramatically, it's better to keep a home with a lower rate. At the same time, buyers who know they will want to move again within 5 years should keep an eye out for homes that could appreciate rapidly. Having equity in a home makes it easier to buy a step-up home down the road.
•    Considering a shorter term


If you are able to afford the mortgage payments with a shorter term loan, the interest rates will typically be lower. The interest rates on 15-year mortgage loans are often less than 30-year terms. Most financial experts still advise people to avoid adjustable rate mortgages, but it's an individual decision. People tend to build up more equity when they have a shorter term mortgage.

When Interest Rates go up significantly, a buyer can't afford as much "home," unless they are all-cash buyers.


As the seller's market continues, the price of homes may continue to go up which affects even the all-cash buyers. Experts say mortgage rates can go up quickly, especially when the Federal Reserve stops suppressing rates through it's QE program.

For more information about finding our perfect Anchorage starter home or a step-up 

home before interest rates go up, contact  us.                            
 

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