Mortgage Interest Rates Have Trended Up But Are Not Slowing the Housing Recovery
While mortgage interest rates may be on the rise, they are not likely to impact the housing market negatively. In fact, the housing market is showing great resilience six months after the interest rate increase in May-June 2013, according to the Housing Pulse Tracking Survey.
In addition, the Housing Pulse Tracking Survey released this week hints that other indicators, such as the improved average sales-to-list price ratio and the average time non-distressed properties sat on the market compared to December of last year, as well as the friendlier lending atmosphere experienced by homebuyers (especially first-time buyers), will mitigate any increased mortgage interest rates. Other stabilizing signs include:
- Looser underwriting standards at Fannie Mae and Freddie Mac
- A decline in time on market to 9.7 weeks, down from 12.4 weeks at the end of 2012
- A lowered average credit score for GSE loans in the fourth quarter – 743 versus 758 from a year earlier
- A fourth quarter rise in the loan-to-value ratios at the GSEs from 75 percent in last year’s fourth quarter to 76 percent
- The average sales-to-list price ratio went from 95.5 at the end of 2012 to 97.1 percent at the end of 2013.
If you are interested in buying or selling a home in Danville, and would like more information about how the housing recovery is affected by interest rates, contact the real estate experts at the Zwahlen Team. Barry and Brenda Zwahlen have been serving the Contra Costa County and Bay area community real estate needs for over 25 years.