Concern of Increase in Interest Rates Spurs Seller's Market
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.
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