The Effect Of Increased Mortgage Rates On Parkland Real Estate?
What will the effect of the expected increase in mortgage rates have on the Parkland and South Florida real estate market?
The FED has recently announced that they will no longer be buying Mortgage Backed Securities. Since October of 2008, mortgage rates on 30 year mortgages have decreased by up to 2%, as the FED was buying up these securities. Unfortunately, most experts agree that mortgage rates will start increasing in the coming months. But, the question is by how much will interest rates increase?
Financial experts at Morgan Stanely strongly believe that rates will go up to approximately 7%, which ironically was the rate before the FED started buying the mortgage backed securities in 2008. Other experts feel that interest rates will still remain low throughout 2010.
Today, Parkland and South Florida buyers must take into consideration the negative effect on their monthly mortgage payments and housing costs as opposed to home prices. Below, please find a graph which accurately displays how even if prices do continue to fall, the increase in mortgage rates could significantly increase the cost for a potential homebuyer!
Buyers should be more concerned about their bottom line monthly mortgage payments for 30 year or 15 year mortgages. Many potential buyers get caught up on the price of homes, but in reality, they should be more concerned with how much their monthly housing payments will be during the terms of the mortgage.
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If you are interested in buying or selling a real estate property in Parkland and need to speak with a Parkland Realtor or South Florida Realtor, please give us a call at 954-609-0591 or send a note to the squawk.