It seems nationally that mortgage rates are climbing much to the dismay of borrowers trying to purchase before things get out of hand with our fiscal policy and quantitative easing. On Feb 13th mortgage interest rates were 4.28% as a national average, on Feb 20th they were 4.33% and today they are 4.37%.
These are increases that should scare you from buying but they are cause for alarm in the long run for the economy and recovering housing market. The Charleston SC housing market has seen great strides since the dismal days of 2008-2012, but there is still a long way to go. Until the job market rebounds dramatically we won’t likely see a full housing recovery for years. Anything below 6% is a wonderful interest rate that everyone should be excited to get if purchasing a home, but many of us have been spoiled for the last few years with mortgage rates steadily hovering just around 4% for so long. The truth is though that the Fed has been buying treasuries to keep the rates low in an effort to prop up the economy and housing market.
They simply can not continue to do so because for one, the monies they are using to purchase these mortgage backed securities is borrowed money from other countries, so in essence as a nation we are borrowing money to borrow money. According to USAToday.com; Mortgage rates have risen about a full percentage point since hitting record lows roughly a year ago. The increase was driven by speculation that the Federal Reserve would reduce its $85 billion-a-month bond purchases. Deeming the economy to be gaining strength, the Fed proceeded last month with planned reductions of its bond purchases, which have helped keep long-term interest rates low.
The biggest bright spot in housing has been with new construction. As there are limited buyers in the market, and those buyers are primarily only wanting new construction so those selling pre-owned homes are finding it difficult to unload theirs. Unless the house has been very recently updated.