At the beginning of May we signed a contract on a home in Mountain View. The buyers we represented decided to shop for a loan before picking a particular program to complete the purchase.
They got 3 quotes and spent an evening comparing the rates as well as other loan conditions. By the next morning only one of the 3 lenders was able to issue a loan on the terms they quoted only a day earlier.
Our clients were able to lock the rate and complete the purchase without being affected by the mortgage rate climb that started on the week of May 9. In the following weeks mortgage rates continued to climb, culminating with a 0.53 percent jump during the week of June 27.
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By the end of June, the average 30-year fixed mortgage rate was 4.46 percent, the highest level in 2 years.
Even if mortgage rates continue moving higher, they will still be well below the levels that prevailed as recently as 2007, before the recession and the financial crisis. Between 2000 and 2007, rates averaged 6.5 percent for a 30-year fixed rate mortgage.
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The affect of the rising mortgage rates on the real estate market is yet to be seen. It seemed to have had a dampening affect on the May-June buying activity by pricing some of the potential buyers out of the market.
On the other hand, some predict that the anticipated rise in interest rates will cause more people to consider buying a home now to preempt potential further rate increases.
