2015 Mortgage Rates and the Cincinnati Housing Market

a copy of a mortgage note

a copy of a mortgage noteAs 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.

If you are thinking about buying or selling a home in Cincinnati in 2015 I would love to work with you. Contact me and lets set up an appointment to talk.

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