May 31, 2013
Interest rates: soaring, skyrocketing, or just going up?
31 May 2013
Posted by Andrew Kantor
I find this headline from DSNews amusing: "Freddie Mac: Fixed Rates Soar to Highest Level in a Year."
Yep, interest rates have risen almost a half-percent since the beginning of May. Now they are 3.81 percent (assuming 0.8 points). What’s funny is talking about interest rates soaring to 3.81 percent. I remember being thrilled when I got 7.5 percent on my house in Roanoke, way back when!
The point, of course, is that interest rates are showing signs of picking up.
Maybe that will spur more potential buyers into the market ("Honey, we should do it now before mortgages skyrocket to four percent!").
Maybe it will bring in more sellers ("Let’s get the house on the market before mortgages go up and no one wants to buy!").
My bet: Fewer buyers if interest rates continue to rise. Higher rates will eventually slow down the stock market (’cause bonds start to look better). So people will freak out and be afraid to buy.
Then again, my business card says "analyst," not "expert."