Lower Interest Rates

January 2015 started off with a bang as interest rates were significantly lower at 3.9% for a 30 year fixed mortgage. Last year at the same time frame, the interest rates were about 4.5%. Good news, right? Yes but there may be a small catch! According to Jonnelle Marte with the Washington Post, there is an expected but minimal increase on the way. “Mortgage rates defied expectations last year by moving lower after investors became worried about lackluster economic growth and stock market volatility. Investors are feeling better about both of those fronts now, once again setting the market up to look ripe for an increase — but not a huge one. Bankrate is projecting that the benchmark 30-year fixed mortgage rate will stay below 5 percent in 2015. Worries over geopolitical risks or overreaction to announcements from the Fed could cause rates to jump as high as 4.8 percent or 4.9 percent, though perhaps only temporarily.” As we all know, every increase counts-so seizing the day applies here. Thankfully, our economy is getting stronger, slowly but surely, take heed and get in on those lower rates while you can.

Higher Demand of New Real-Estate

Naturally with what our country has been through in the Real Estate market, home builders cinched-back and focused on simply hanging onto their own homes. Now, analysts are noticing their heads popping up out of the sand, and what are they hearing? …a demand for new homes. Home builders are finding themselves encouraged to get back to work, new home buyers are forming a line, waiting for some fresh inventory to choose from. The Washington Post noted, “There were relatively few listings in December (2014), as the supply of homes on the market dropped to 4.4 months from 5.1 months in November (2014), the Realtors said. The supply was the lowest in two years.” Granted, there is some apprehension, of course, and it will take some time for builders to replace their crews with quality workers to face this demand. “Homebuilders, particularly small builders, are still having problems ramping up construction to improve supply. The only way to take the pressure off the supply situation is to build more homes,” said Lawrence Yun, chief economist at the National Association of Realtors in an interview. Although, easier said than done- Nonetheless, builders are gearing up and the economy is showing to be falling in line. Brian Collins, Washington Bureau Chief of National Mortgage News concluded in his recent article, Low Inventories Putting Damper on Housing Recovery, that we still have “optimists” growing in our housing market and their faith in the market is increasing both for the supply of new homes as well as the supply of new home buying. From the sounds of the chatter from the experts in the field, we can take a deep breath and plan to be pleased with the growth and outcomes in 2015.