Real Estate Interest Rates Likely to Rise Post Election Period
‘Relatively Soon’ Rise for Interest Rates as Mortgage Rates Shoot Up Post Election
Rates have risen about a half percentage point right after the election as I have noticed from some of Ann Arbors local lenders. A rise in the key interest rate could come “relatively soon,” Federal Reserve Chair Janet Yellen reiterated on Thursday, heightening the probability the Fed will forge ahead with a hike in December, despite initial doubts in the wake of Donald Trump’s presidential victory. Mortgage rates, which generally follow the key rate, shot up this week, with the 30-year fixed rate mortgage topping out at an average 3.94 percent from 3.57 percent the week prior.
“This week, the verdict is in—over the last two weeks, the 30-year mortgage rate jumped 40 basis points to 3.94 percent, almost identical to the 39 basis point increase in the 10-year Treasury yield,” says Sean Becketti, Freddie Mac’s chief economist. “If rates stick at these levels, expect a final burst of Home sales and refinances as ‘fence sitters’ try to beat further increases, then a marked slowdown in housing activity.”
Yellen’s position—which comes as the dust settles after one of the most contentious elections in history—reinforces the sentiments of Federal Reserve Bank of Philadelphia President Patrick Harker and Federal Reserve Bank of St. Louis President James Bullard, who both voiced support for future hikes this week.
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Tom Stachler is a licensed Broker and Builder marketing homes and properties in the Ann Arbor Michigan area. Also search for properties, houses, and condos for sale in Saline, Dexter, Chelsea, Milan and the Ypsilanti real estate markets. Check out the handy Links for realty related information and and MLS inventory access above.
