Mortgages are Up .62% Since Early May
In addition to home values and tight credit, Daytona Beach homes buyers now have something more to consider. Interest rates in early May were 5.80% for a 30 year conventional mortgage. Today, the rate as published by bankrate.com was at 6.42%.
The affect of a rate increase of this size is about $80.00 per month on a $200,000 mortgage. We have been concerned about rising interest rates for some time and have warned that rates are going to increase based on government spending, the falling dollar, and inflationary pressures. We now believe there is another factor at play – lenders will not begin lending until rates make it more profitable for them to do so. The reasons are pretty basic. They are back in the loan business, and not so much in the loan selling business. They will need to make their money from the loans and higher rates give them the additional margins that they need to replace the profits from selling loans.
More information can be found, this week and every week for our Daytona Beach Real Estate Weekly Report. It is published every Monday and includes sales for Daytona Beach area homes over the past week and month, mortgage rate information, and home inventories as well as short analysis and articles of interest.
Daytona Real Estate Sales Up
Sales are up for July over June by about 10% at this point of the month (164 vs. 150). This doesn’t mean that July sales will exceed June sales, but it’s a good sign that we are maintaining our sales gains of the second quarter over the first quarter of 36%.
So buyers beware of rising interest rates and their affect on mortgage rates.