Mortgage Rates on the Rise. Go FHA
Interest rates are on the move and they’re heading north. As of Thursday, December 15th the rate for a 30 year fixed mortgage reached 4.16%; that’s the highest it’s has been since October 2014. The results of the election on November 8th has caused the upward trend. Right before the election the rate was 3.57% for the 30 year fixed so we’ve had quite a bit of movement in the last 5 weeks. A rate of 4.16% is still low historically speaking so do not be discouraged if you are on the market to purchase a home.
A sustained decline in government bond prices after Trump clinched the election has facilitated the rise of mortgage rates. The selling of US bonds has lifted yields, which in turn puts upwards pressure on long term mortgage rates. Well how about that, eh. This means that it is all connected in a way.
If you’re a first time home buyer, the good news is that these rates are still pretty low and economists from Realtor.com believe the rise will taper once the new administration takes office. That is, the rate will not increase much more in 2017.
The rise in mortgage rates has not impacted FHA borrowing limits. It’s important to note that the FHA borrowing limit in both Los Angeles and Orange County is $625,500. That’s incredibly high relative to other Counties like Fresno where it’s at $327,000. I still advise new homebuyers to go FHA when they can because the rate will be lower than conventional financing. Also, FHA buyers usually put less money down to buy a house and do not need perfect credit. Most houses will go FHA while only a few condominium communities accept FHA financing. Holler if you’re looking to buy. That’s why I’m here.