LIME REALTY GROUP pays close attention to the daily movement of the mortgage rate and although we’ve seen some significant reductions in the rate over the past couple days, economists are uncertain as to how the rate will move in December and just where we’ll end up at the end of 2018.
Fed Chair Powell’s comments today may force rates lower because his comments had a direct effect on the bond market. But the minutes of the Fed’s recent meeting point to a rate hike in December. So which indicator is stronger and which will prove out?
The answer is probably both. With all sorts of political and financial happenings effecting the bond market so strongly, we’re likely to see a seesaw effect throughout December. The rate will hike one day and sink the next. So if you’re considering a mortgage in this climate, it’s most important to lock in a lower rate when it swings toward the downside than get hung with a higher rate when you actually want to close.
So how will we start 2019? Probably close to where we are right now… A 30-yr fixed mortgage is currently at 4.84%. That’s closing in on 5% but still not there yet. We might stay lucky and end the year under 5%.
How does this effect you? As we discussed before, the higher the rate, the less home you can buy for your money. If you’re relying on a mortgage, these percentages can mean the difference between buying the home you want and settling for your 2nd or 3rd choice because you just can’t quite afford your dream home. It also means people will start to be priced out of the market.
Southern Utah continues to grow at an enormous rate and we should continue to see new home construction happening all around us and home values continuing to rise, but we’re probably one of the few places in the country where that is the case. Many areas are slowing and the value of homes is leveling off as demand eases. Especially during the holiday season.
If you’re considering buying a home right now, call Lime today. We have some amazing deals by motivated sellers and we’ll be happy to help you get into the home of your dreams!