Category Archives: Mortgage Rates

Are Mortgage Rates Set to Blast Off?


Are Mortgage Rates Set to Blast Off

The Fed is expected to raise interest rates for the first time in 10 years and uncertainty hangs over the financial markets and the direction of interest rates. Will this be the first of many rate hikes? Will it have a huge impact on mortgage rates going forward?

Home buyers don’t need to panic, but they should have a sense of urgency if they plan to buy in the next year or so and want to get the most house for their money.

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The Past

In early 2000s, following the dotcom bubble, the Fed decreased its benchmark rate to 1 percent. In the summer of 2004, the Fed started hiking the rate by a quarter percent. When the increases started, a 30-year fixed-rate mortgage had an interest rate of 6.3 percent, but instead of going up it went down to 5.7 percent during the next 4 months.

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Where Will Home Values Go in the Next 5 Years?

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When most people buy a house, they think at least 5 years out.

That’s one of the reasons it’s a good idea to look that far ahead when you are considering purchasing or trading up to a bigger home.

The Home Expectations Survey, published quarterly by Pulsenomics, provides a quick summary of what a nationwide panel of 100+ economists, real estate experts and investment & market strategists expect housing values to do in the next 5 years.

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The average projections of all the experts are summed up in a single percentage that defines where they think prices are headed.

Here’s What the Latest Survey Revealed

  • Home values will INCREASE by 4.1% in 2015 over 2014 values.
  • Home Values Will INCREASE by 18.1% (cumulative) by 2019.

That’s an average annual appreciation of 3.4% over the next 5 years. (3.4 x5=18.1).

Pessimists and Optimists

The most pessimistic experts taking the survey thought the cumulative appreciation would be at least 10.5% by 2019. While the quartile of experts with the most optimistic outlook expected home values to rise over 25% in the next 5 years, exceeding bubble-era peaks by February 2017.  If the panelists’ projections hold true the median U.S. home value will break through the April 2007 pre-recession peak of $196,400 in December of 2017. (See Chart Above)

Bottom Line

As I’ve said here before, sooner rather than later is the best time to buy a home. This survey further supports my conclusions. Values are expected to go up. Also, this month, the Fed may raise rates. Even if they wait — due to stock market volatility — it is only a matter of months (not years) before they do so. The bottom line:  If you plan to buy or sell in the next 5 years, NOW is the optimum time. If you wait, you risk higher prices and interest rates eating away at your buying power. 

Contact Us Today and We’ll Help You Find the Home of Your Dreams

Call me at 912-844-9000 or fill out this contact form and I’ll reach out to you.  But hurry, you don’t want to wait too long and miss this optimum buying opportunity.

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How the End of “Free Money” Will Affect Savannah Mortgage Rates

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It’s the end of “free money” according to Erik Davidson, chief investment officer for Wells Fargo & Co.’s private bank. He called this week’s Fed announcement a “major inflection point.” Now the question is how will this impact Savannah mortgage rates.

As expected Yellen and the Fed did not raise rates, this time, but almost everyone expects at least a 0.25 percentage point bump up when the Fed meets again in September.

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Mortgage Rates Climb Above 4% for First Time in 2015

Mortgage rates recently jumped over 4 percent for the first time this year according to Freddie Mac’s Mortgage Market Survey. Expect to see even bigger increases as time goes by and September draws nearer. (Read More)