Chris Reese, The California Mortgage Hero and Certified mortgage planners shares this article titled Record Low Mortgage Rates Now Haunt the Housing Market. The author has an interesting perspective. They explain how the extraordinarily low rates we’ve seen the last couple years on 30 year mortgages is encouraging would-be home sellers to hang on to their current home rather than give up such low rates and pay more on a new mortgage. It goes on to say how this phenomenon has never really occurred in history before. Traditionally people were able to sell their older home and achieve a lower interest rate on the next.
I personally don’t think that this is a huge factor. If you need to move out of a 1200 sq ft home and into a 2200 sq ft home, your payments are going to go up regardless of whether rates are higher or lower, you’re buying a bigger house. Conversely, people moving down in home size will have smaller payment because even if rates are higher, the payment is based on a much lower loan amount. This period of really low 30 year mortgage rates will most likely make future refinances suffer because if people will be staying in the same home, then they would likely not want to give up their really low rate unless they were taking cash out for some other purpose such as buying another home, paying for college, funding elder care etc…. You be the judge and let me know what you think by commenting below.
You can read the the entire article here Record Low Mortgage Rates Now Haunt the Housing Market. Find out what 30 year mortgage rates look like and if you can benefit from a refinance or move up purchase. Contact the Reese Mortgage team for your free mortgage review, pre-approval, or property value analysis at 916-502-1656
30 Year Mortgage Rates So Low They"re Causing a Shortage of Housing
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