Interest Rates And Real Estate Forecasts Affecting Anchorage Buyers

Posted by Dan Wolf on Tuesday, February 24th, 2015 at 1:46pm.

Whether you are a first-time homebuyer in Anchorage, Alaska or a step-up buyer, real estate trends may be of particular concern. Step-up buyers may worry they may be trading their lower interest rates of 3 or 4 percent for higher rates in the New Year if they make a move. The New Year will bring changes for homebuyers. The key is to have an experienced Realtor who knows the Anchorage real estate market so you can benefit from the positive real estate trends and be sheltered from any negative trends. Of course, many real estate predictions are simply predictions.     

•    Looking at interest rates rising

According to a recent article by The Washington Post, mortgage rates are headed to 5 percent. From a historical perspective, 5 percent is still low compared to the double-digit interest rates people dealt with in the 1980s. However, for someone who currently has a 3 percent interest rate, the two percent hike could give them less purchasing power when looking at Anchorage homes. The trickle down effect is that buyers have to be savvier about their listing prices and other factors.


•    Hearing from the experts

The Post article cites the Mortgage Bankers Association which says the average interest rates on 30-year, fixed rate mortgages may rise to 5.1 percent by the year. That’s a full percentage point higher than where it was in recent months. Other experts point out that the interest rates may stay lower for a longer period of time if the global economic and political issues take a negative turn. In a nutshell, though, it’s the Fed’s “quantitative easing” program which pumps money into the economy that kept interest rates low. Now that the Fed has said the program is ending, everyone is keeping a close eye on mortgage rates.

•    Budgeting for higher rates

As a homeowner, you can get pre-approved for a certain loan amount. The amount a lender gives you is based on your debt-to-income ratio. You can also put money down toward the home purchase. Some good loan terms include a 15-year fixed rate loan or a 30-year fixed rate loan as well as many other mortgage products. Most experts recommend avoiding adjustable rate mortgages, especially when interest rates are on the rise. According to The Post, one study showed when interest rates went down significantly, borrowers with adjustable-rate mortgages saved an average of $150 a month. However, when rates go up, borrowers may be faced with much higher mortgage payments than expected.

While interest rates are still at historic lows, it’s a terrific time to make a move. At Wolf Real Estate, we can help you find your forever dream home or assist you with the sale of an Anchorage home. For more information, please contact us at 248-9653 or visit us at www.

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