Mortgage Rates Steady, But What About Next Week?

The latest reports indicate that mortgage rates across the country are holding fairly steady at 4.57% – near the highest level (4.58%) we’ve seen in two years – but that could change soon. The average mortgage rate for a 30-year fixed-rate mortgage has steadily increased over the past year as the economy has recovered. At this time last year, the rate was 3.55%, so a full point increase is a substantial upward move. That move could continue next week as the Federal Reserve takes a look at its bond purchasing program. For several years now, the Federal Reserve has engaged in a consistent bond-buying program designed to keep the nation’s interest rate low to encourage lending and spur economic growth. The record-low mortgage rates we’ve seen over the past few years – including an all-time low of 3.31% in November, 2012 – are a direct result of the Fed’s actions in the markets. Now, though, the Federal Reserve is considering reducing the amount of bonds it purchases on a regular basis, which would likely spur a rise in long-term interest rates and thereby increase mortgage rates sooner rather than later. That is not necessarily a bad thing; our economy as a whole is improving, especially in the state of Alabama as we are no longer in a recession. Higher rates because of economic improvement mean more buying activity, ultimately, since affordability should also rise. Those looking to make a purchase in the very near future should still keep an eye on rates and make sure they get the best long-term deal for their investment. If you are looking for a Birmingham, AL property manager with deep experience in the local market, then call on gkhouses.com. Call us today at 205.940.6363 to learn more about managing your Birmingham rental houses with ease.