January Update – Mortgage Rates

My phone was buzzing with questions from clients wondering if mortgage rates would be impacted from the Federal Reserve’s decision to raise the key fund rate. “If only I had a crystal ball,” was what I found myself saying.

It’s important to note that home mortgage rates are not directly tied to the Federal Fund Rate. Revolving lines of credit, on the other hand (think: home equity loans or credit cards) are more closely related. Mortgage rates follow bond yields, specifically the 10-year treasury.

While I don’t have that crystal ball, analysts and economists from organizations like the Mortgage Bankers Association or government-sponsored funders like Fannie or Freddie are predicting that mortgage rates may increase gradually over the next year. Take a peek at the chart below for what they’re predicting. Mortgage Rate Projections

FHA Loan Limits Increase

Also this month, the Federal Housing Administration (FHA) increased FHA loan limits to both counties Utah and Salt Lake County. The FHA loan limit for Salt Lake County is now $312,800 (up from $304,750) while Utah County is $303,600 (up from $293,250).

My take: There’s no need to hit the panic button; in the big historical picture, mortgage rates are still very low. However, if you believe the predictions, then now is the time to buy and you’ll only pay more interest the longer you wait. We had also hoped the FHA limit changes would be more substantial, but there are still many homes available that fall in those guidelines, and can be had for minimal down payment.

Posted on January 5, 2016 at 1:31 am
Scott Steadman | Category: Market Update | Tagged ,

Where are mortgage rates headed?

This is one of the most common questions folks ask me. Where are rates going? What will happen after the election? What will happen after the holidays? What will happen next year? Should I wait to see if they go lower? Should I buy now before the go higher? 


Below is a fantastic article I'd like to share with you folks. 


 The best people we can go to on this issue are the people who deal with it on a daily basis –The Mortgage Bankers Association (MBA). Here is what was reported by MarketWatch in a recent article:

“After reaching record lows in 2012, mortgage rates are expected to creep up slowly in the year ahead, the Mortgage Bankers Association predicted.

Rates on the 30-year fixed-rate mortgage are expected to average 3.8% in the fourth quarter of 2012, rising to 3.9% in the first quarter of 2013 and eventually rising to an average 4.4% by the fourth quarter of next year.”

If the MBA is correct, mortgage interest rates could inch up almost a full percentage point in the next year. Tomorrow, we will explain what that means to a potential buyer.


Posted on November 7, 2012 at 3:41 am
Scott Steadman | Category: Uncategorized | Tagged , , , , , , , , , , , , ,