Buying Your New Home in OKC Ahead of Mortgage Increases
December 11, 2015
In mid December the Federal Reserve’s rate-setting committee will discuss rate increases for 2016. Thus far the over the past 6 years there is a 75% likelihood that the federal funds rate will increase. It is possible that the rate will increase by .25%. While this is a short-term rate increase, it may have a negligible effect on long-term pricing. What it does indicate is that the trend is upward. The long-term rates tend to follow the short-term trends. What does all this mean to you as a home buyer looking for real estate in Oklahoma City? While the short-term increase already appears to be built into current mortgages with a slight rise over the past couple of weeks, it does mean that over time pricing could start to go up. When mortgage rates rise so do home prices. Freddie Mac predicts that mortgage rates will increase up to .6 percentage points over in 2016 and home prices will follow suit with a 4.3% increased. This is compared to a 5.4% rise during 2015. While these are all predictions and there are a lot of other organizations that analyze the data and predict slightly different outcomes, it is very likely that rates and prices will rise. While this can be frustrating to some would-be home owners who have been waffling about home purchases for the past couple of years, the overall increase will still be much lower than the average 6% or higher we saw available 8 years ago. Over the past several years, we here at Ideal Homes have made leaps and bounds to create value packed homes with energy efficient systems, designs with livability in mind, and our communities are in excellent locations convenient to recreation, schools, and commutes. While interest rates and home pricing goes up, our value is constantly increasing in everything you do.