Are Mortgage Interest Rates Headed Up?
Are interest rates headed up?
Most experts are saying, yes. The Federal Reserve has been artificially keeping rates low for the last year. At the end of March, The Fed has announced they will quit buying Mortgage Backed Securities, which will cause rates to rise. Financial experts are saying rates may rise for 1-1.5% and that it could happen in short period of time. This could be devastating for a home buyer.
If rates rise 1%, you could see your purchase power decrease by 10%. On a $250,000 home, that is a $25,000 drop in the amount of home you can purchase. What about if rates go up 2% and rates end up in the 7’s? We are talking a 20% decrease in purchase power, or in our example,
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