Mortgage rates had their biggest jump this week in 26 years and rose from 3.93 percent last week to 4.46 percent this week.
Although this is a huge jump in mortgage rates, it still is still at a 60 year low. Below is a chart showing the mortgage rates since 1972 until June 2013.
Pending home sales are at a six year high, and many experts believe this is the time to take advantage of the low mortgage rates before they increase. Freddie Mac released a report this month that most markets across the US will be able to bear up to 5 or 6% before the housing affordability index begins to hit a barrier with increased mortgage rates.
Thus, according to Freddie Mac, rising interest rates will make the amount of people able to buy homes a smaller and smaller percent of the country. The regions who will feel this impact first will be places where the affordability index is most impacted by mortgage rates. These places are where housing is expensive such as San Francisco south to San Diego, and Washington, DC north to Boston.
Chief Economist, Frank E. Nothaft of Freddie Mac stated, “It is important to put these movements in historical context. Real interest rates are still half of what they were prior to the recession and are still very low by historic standards. Even with increases in house prices and rising mortgage rates, home purchases in most of the country will continue to be very affordable.”Ready to jump in? Start your condo search, and contact one of our specialists today.