Wednesday, July 3, 2013

Only 5% of homebuyer's expect rates to drop over the next 12 months

Among the questions asked in the May 2013 Fannie Mae Housing Survey was, "Do you expect mortgage rates to go up, go down, or stay the same in the next 12 months?".

Just 5% of those surveyed expect mortgage rates to drop.

This may be another reason why such a large percentage of respondents said "now is a good time to buy a home". When mortgage rates rise, buyers know, purchasing power wanes.
From today's levels, for every 1 percentage point higher which mortgage rates go, a buyer's maximum purchase price declines 11%.. Rising rates, therefore, can mean the difference between buying a home with 4 bedrooms or three; with 3 bathrooms or two; and with a three-car garage or two.

Rising rates can also mean the difference between buying or renting for another 12 months.
Homeownership is attractive to renters because U.S. homes remain affordable and mortgage rates are still quite low.  Plus, with the high-availability of low-downpayment loans including the Fannie Mae Conventional 97 program and various FHA program, choosing the best mortgage program for your needs is easier than ever.

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