Interest rates appear to be creeping up! With the new stimulus package recently signed by congress, home buyers sitting on the fence may want to take heed. Why is this perhaps the best time in years to buy a home as a first time home buyer, or for move up buyers?
As a first time home buyer, congress has decided to change last years first time home buyer tax ‘loan’ to what is now a full tax ‘credit’ of $8,000 to individuals who have not owned a home in the last three years. This doesn’t need to be repaid like last years incentive plan.
Interest rates. I wish I had a crystal ball and could accurately predict what mortgage rates will do in the next 6-12 months. I don’t claim to be able to do that. I can relay what I have been reading in various articles, and what history has taught us. With rates fluctuating in the Minneapolis area markets, between 4.625 percent and lately have crept up to closer to 5% on a 30 yr conventional loan, with good credit scores and 20 percent down.
Many economists feel that rates are headed higher this year. This is supported by the theory that with all of the stimulus money being printed by the government, this will push the value of the dollar down. In turn foreign investors may decrease which in turn will cause interest rates to rise. It gets complex for sure, but the gist of things for home buyers is that rates are currently at historic lows. So if one is to place bets, the safe bet is that rates will eventually go up, it is just a matter of how fast and how high.
As of the end of February, we haven’t exactly seen the spring market hit, but there was a nice sign of activity in January at least locally. I will keep you posted if we begin to see showing activity increase.
I would love to hear from you, what do you think interest rates will do in the next 6-12 months!
