Miami Home Mortgage rates continue to rise, have risen in the past few months, but still remain attractive compared to historical levels. Jim Carter and Miami Home Loan 4U staff has done a little research to understand what is happening. As you can see from the chart, rates are still as historical lows from the last 60 years! Here is the detail behind what is happening.
(Reuters) – Expectations the Federal Reserve will slow its economic stimulus program by the end of the year pushed mortgage rates higher last week, sapping demand from potential home buyers, data from an industry group showed on Wednesday. Rates measured by the Mortgage Bankers Association jumped to the highest level since July 2011, which also cut into refinance activity. The share of refinance applications fell to the lowest level in more than two years. Interest rates on fixed 30-year mortgage surged 12 basis points to average 4.58 percent in the week ended June 28, the MBA said Rates have been rising since early May, with the increase accelerated by comments from Fed Chairman Ben Bernanke last month that the central bank expects to wind down the pace of its quantitative easing program later this year if the economy improves as expected. The Fed has been buying $85 billion a month in bonds and mortgage-backed assets to keep borrowing costs low and stimulate economic growth. The historically low mortgage rates have helped lure in buyers as the housing market gets back on its feet. The recent higher cost of mortgages has raised concerns that the increase could dampen demand and slow the housing recovery, though most economists do not expect it to be derailed. Even with the increase, rates remain historically low. Last week, the Mortgage Bankers Association announced that applications for home loans fell last week by 11.7% compared with the prior week. The drop was particularly dramatic in the refinance market, which plummeted by 16% on a weekly basis to its lowest level in two years. The volume of applications for purchase-money mortgages slipped by a comparatively reasonable 3%, the trade association noted Mortgage rates reached their highest point in two years last week,” said Mike Fratantoni, MBA’s vice president of research and economics. “At these rates, many fewer homeowners have an incentive to refinance. … With this decline in volume, the refinance share dropped to its lowest level in more than two years. Purchase application volume also declined, but not nearly to the same extent, as affordability remains strong.”
And if this weren’t bad enough for bank stocks — although, as I’ve discussed previously, there’s also considerable upside to higher long-term interest rates from a bank’s perspective — it was announced yesterday that the Fed will begin subjecting the nation’s largest lenders to heightened capital requirements relative to their smaller community brethren. That means the availability of funds will decrease, but, we do not know how much. We will keep you informed on a weekly, and, daily basis if needed to lock in a loan via my Facebook page, and emails as needed.
So, if you or, anyone you know, is looking to find a Miami Home Loan to purchase their own new property, and would like help in getting their best financing solution call me, Jim Carter at Element Funding, at 305-525-6742. Your Miami Home Mortgage expert!