If you’re a home buyer, home owner or home seller, you think about mortgage rates. Lately, mortgage rates have been near record lows. However, you would think inflation would push them up. Luckily, Jonathan Smoke, chief economist of realtor.com, helps discuss the upcoming direction of mortgage rates.
“Global economic concerns, most recently from the Brexit fallout, have kept our mortgage rates low as investors sought refuge in dollar-denominated assets, U.S. bonds, and U.S. mortgage–backed securities. In addition, our own slowdown in economic growth as a result of lower energy prices and lower exports put on hold the Federal Reserve’s previous plans to raise interest rates early and often this year,” he wrote. These factors explain why mortgage rates are so low.
So, what is the direction of mortgage rates now? That’s when we look to new data about global and national economic growth. Rates are expected to remain steady in August like they did in July. That means if you are a home buyer, take advantage of this summer. Smoke thinks September could see an uptick after the Fed’s meeting late in the month. It would still be slight. However, these low rates won’t last forever. They should rise normally.
“Eventually, we will clearly see that these low rates are a historical anomaly. The question is therefore not if, but when we will see rates moving more consistently upward to a more normal range. To me, it seems like we’re edging closer to that inflection point,” Smoke wrote.
Before you worry about the future direction of mortgage rates, take advantage of today’s low ones. There is absolutely no time like the present to make an offer on the home you’ve been eyeing in Miami. If that doesn’t draw you in, looking at the amazing properties RE/MAX Paradise has available surely will.