Interest Rates: Will Cost YOU TO WAIT

Interest Rates

are

                        G

              N

  I

                                  S

                                                     I 

                                      R

                    And it is going to HURT!

 Though various mediums(blogs, Facebook posts, twitter feeds, etc) I have been sharing various mortgage companies, Realtor analyst data and my own input on the pressure on interest rates.

Though the rates are not out of hand,  the handwriting is on the wall and it won't be erased any time soon.   

Add the strengthing home prices seen between 2012 and 2013, you find that the cost of delay is over $200 per month! That equates to over $82,000 over 30 years.   

Look at the data for yourself:

If you have been waiting to sell or to buy, don't think that you missed out!  That is very limited thinking.   Sure you didn't buy Google either at $45 so can be upset that it is over $1000 now.  Yet, I doubt it is what wakes you up every day.

The same is true of missing out when prices were at there bottom two years ago and interest rates were lower.  Prices are still very

sharp in most of the country and in Hampton Roads specificially.  And rates are way way below historical averages(7.5% range).

Thus,  the getting is still very good.   

So don't wait!!!  Now is the time to sell and downsize or upsize. 

Now is the time to STOP paying rent and save by owning a home.

What are you waiting for??????

Home Prices up over 8% ---Mortgage Matters

More great news...this time from Jim Belote's Mortgage Matters.  Even if you don't get past the 1st half of the article, you will be doing handstands if you own a home.   Though noting that different indices that are watched vary doing in elements of the means they measure, the summary stated 

"The good news is that prices are up all the way around, no matter how they're measured."

Isn't that what we care about anyway????

Keeping you updated on the market! For the week of  September 2, 2013 MARKET RECAP The End of Rising Home Prices? When recent data is vetted, the answer appears “no.” Home prices will continue to rise. The latest data from S&P/Case-Shiller show prices increased 0.9% month over month in its 20-city index in June. Year over year, Case-Shiller shows prices are up 12%. Meanwhile, data from Lender Processing Services show home prices were up 1.2% for June, which translates to an 8.4% year-over-year gain. We frequently refer to price data from a number of providers, and you might have noticed that the numbers are never the same. We'll use Phoenix as an example. The latest data from the major data sources show year-over-year home-price gains for Phoenix, but the numbers differ. S&P/Case-Shiller FHFA CoreLogic LPS FNC Zillow 19.8% 21.2% 17.1% 16.6% 27.5% 22.0% Time frame, geography measures, and data-gathering methodology are responsible for the differences: CoreLogic uses a three-month moving average. Case-Shiller's definition of a metropolitan is generally broader than the other data service providers' definition. Zillow excludes foreclosure resales, whereas LPS “reflects” price discounts for REO and short sales. FNC attempts to capture the “characteristics” of a home sale in its home price index. The good news is that prices are up all the way around, no matter how they're measured. That said, Case-Shiller's latest release did reveal incidences of slowing price appreciation. We're not terribly surprised; we've been saying double-digit annual price increases are unsustainable for the long haul. We wouldn't be surprised to see year-over-year home-price growth dip into the single digits by the end of the year. That said, we don't believe home-price appreciation will be hindered by rising mortgage rates – as long as the economy improves. On that front, gross domestic product (GDP) growth was revised upward to a 2.5% annual rate for the second quarter. This is good news that points to stronger-than-expected growth for the third quarter. Strong GDP growth, in turn, frequently leads to stronger job growth. Strong GDP growth will also lead to rising mortgage rates, which actually retreated this past week. Last week, we mentioned that the Federal Reserve is the primary driver of interest rates these day. This isn't to say that other factors don't matter. This past week, talk of a U.S. military strike against Syria was ramped up. In response, many investors scurried for the havens of Treasuries and mortgage-backed securities, thus sending their yield lower. We don't believe concerns over Syria will be long lasting. Therefore, the reduction in lending rates is likely a temporary reprieve that potential borrowers should exploit. Economic Indicator Release Date and Time Consensus Estimate Analysis Construction Spending (July) Tues., Sept. 3, 10:00 am, ET 0.2% (Increase) Important. Surging residential construction continues to drive overall construction spending. Mortgage Applications Wed., Sept. 4, 7:00 am, ET None Important. The respite in rising interest rates has helped lift purchase-application activity. Federal Reserve Beige Book Wed., Sept. 4, 2:00 pm, ET None Important. Credit markets will look for more signs of the timing and extent of Fed tapering. Employment Situation (August) Fri., Sept. 6, 8:30 am, ET Unemployment Rate: 7.4% Payrolls: 165,000 (Increase) Very Important. Job growth is a key variable in the Federal Reserve's decision to raise interest rates. The Two-Percentage Point Spread The word “taper” seems to be on everyone's lips these day. As we note above, the Federal Reserve holds the key to higher interest rates. Most market watchers are simply waiting for the Fed to cut back (or “taper”) its purchases of Treasury notes and bonds and mortgage-backed securities. The consensus belief is that when tapering begins, rates will rise. That could be true. But then again, market's are anticipating entities. It's also possible that any interest-rate increases won't be very pronounced, because once tapering begins, its effects will already be built into lending rates. The same market watchers are also speculating on how the Fed will tape: will it taper purchases of both Treasuries and mortgage-backed securities, or only taper Treasuries? If it tapers only Treasuries, it's possible that mortgage rates won't be effected, at least that's the prognosis we've heard. We're not so sure that how tampering materializes matters, because Treasuries are benchmark instruments. The 10-year Treasury note, in particular, is very influential on the 30-year fixed-rate mortgage. As one goes, the other follows in lock-step. The point we want to emphasis is that regardless of how the Fed tapers it will impact the mortgage market. Unfortunately, we simply don't know the magnitude of the impact.

Prices Improving; Pending Home Sales UP UP UP

Though real estate is very much a local market, the S&P Case-Shiller graph above tracks improvement in prices from January 2012.   It is very clear that

the prices are rising at a rapid rate.

The cause for the rise is the shortage in inventory combined with a surge of pent up demand(buyers coming out of the woodwork!).

This is evident in the graphs below showing the rising pending Home Sales since January 2012 and the more telling second graph on Pending Home Sales.

The second graph notes how 2103 as been above the '100' healthy market mark while 2011 and 2012 struggled to make the mark though the market improved thorough out the period.

Even with rising interest rates this trend has been unabated.

So what will you do???

The News is A Buzz On Mortgage Rates

See the latest CNBC story on Mortgage Rates and Home Prices??

Have I said it is time to get off the fence?   I know I am a Realtor that may only be looking to list and home or get a buyer.  But that isn't why...it is for your benefit!

Listen to this article produced by Matthew J. Belvedere. 

CNBC Mortgage and Housing Discussion

Now you heard from CNBC.....you know that moving, if you need to move to that larger or smaller home, is a smart move NOW!!

Call your Realtor today!