Experts predict that with the recovering economy, a shift in Federal Reserves, and rising home values, interest rates will reach above 5% in 2014. With a steadily growing housing market, buyers shouldn’t allow rising interest rates to deter them from buying a home.
Here are four reasons buyers shouldn’t let rising interest rates affect their home search:
1. Mortgage rates rising but they are not reaching drastically high levels.
Looking at interest rates in a historical context helps put our rising interest rates in perspective. Close to a decade ago, a 30-year fixed rate mortgage was around 5.24%. The dramatically low rates due to the housing market crash has made 5% seem like a huge increase but it is normal for a healthy housing market.
2. Housing inventory increases.
Nationwide, home values are hitting a 7 year high and have continued to increase for 17 consecutive months since last year. New construction also continues to dominate the market, creating an increase in the supply of new homes.
3. Less competition from investors.
Real estate investors, who like to buy cheap cleaned up in the wake of the housing market crash. They often bought up reasonably priced properties before regular homeowners had a chance. With home prices rising, experts are predicting that investors will slow down their buying leaving more inventory for individual home buyers.
4. Federal Reserve’s tapering.
Mortgage rates have started to steady, and the tapering of Federal Reserve regulations signals a recovering and strengthening economy.
For more information visit: http://finance.yahoo.com/news/4-reasons-you-shouldn-t-worry-over-rising-mortgage-rates-223016788.html