2015 Mortgage Rates and the Cincinnati Housing Market
As the year comes to an end I have been getting some questions from my current buyers and former clients about the market in general, where I think the interest rates are headed, and if it is going to hurt or help them sell their house. I have a few ideas to share but have to note that these are based on my experience and not some inside information I have.
2015 Mortgage Rates will go up slightly
The reality is that we have to remember that our 3.5% and 4.5% mortgage rates are courtesy of a monumental effort to repair our economy at large. These are not ‘typical rates’ and think otherwise is shortsighted. If you listen to the unemployment reports we are approaching a typical ‘normal’ unemployment rate and so the banks and regulators at the Fed will begin to pull back on their low interest rate policy. That will trickle into the mortgage market for everyone. I would say to anyone looking to buy in the summer of 2015 to be prepared to have a rate that is about 1% point higher than you get quoted today.
The Less Qualified Borrower Will See Even Higher Rates
Unfortunately the less qualified buyers are going to see even larger rate hikes. The fact is that lenders still think that less qualified borrowers are a bigger risk of default and they are taking extra precautions to price in that risk to their loans. If you are putting less money down, or have a tarnished credit score, or are borrowing at your limit expect to pay even more in 2015. In some cases it may make sense to hold off on a purchase until your credit scores are improved and your down payment is slightly larger. It will help your affordability in the long run.
2015 Mortgage Rates Will Not Slow Down The Cincinnati Real Estate Market
The local market has strong momentum going forward, and a 15 increase in the mortgage interest rate will not slow down it’s velocity. Incomes are good in our community and homes are still very affordable compared to the national average. The cost of home-ownership will increase for those who purchase in 2015 but it will be negligible and should not deter home buyers from making offers.
At The Alison Moss Group, Cincinnati is more than a city to us–it’s our hometown. Since launching in 2008, our clients have depended upon us to lead them through the home buying and selling journey. We are the go-to resource for all of your needs before, during and after the sale of your home.