From the National Association of Realtors: DAILY REAL ESTATE NEWS | THURSDAY, AUGUST 01, 2013
The Federal Reserve announced Wednesday that it will continue purchasing $85 billion in bonds each month — at least for now. The Fed’s bond-purchasing program has helped move mortgage rates to their lowest levels on record in recent months. However, the Fed has signaled that the program could likely come to an end soon, causing a shift upward in mortgage rates.
"The Fed did not mention why mortgage rates have risen — which almost certainly is due to market expectations of tapering in the near future and may have influenced the Fed in not changing its guidance," Econoday analysts said.
The economy added 200,000 new jobs last month, 20,000 of which were construction jobs due to an upswing in housing. The job growth could point to less need for the bond-purchasing program.
Federal Reserve chairman Ben Bernanke has made recent comments that a slowdown in bond-buying could begin some time this year.
Source: “First Take: Fed waiting, but jobs tell real story,” USA Today (July 31, 2013) and “Fed recommits to current pace of MBS purchases,” HousingWire (July 31, 2013)
From the National Association of Realtors - August 1,
Home sellers are becoming increasingly worried about rising interest rates and their impact on home-buying demand, according to a new Redfin survey of nearly 1,500 home owners across the country.
Forty-seven percent of survey respondents said they are concerned that rising rates could lower demand before they get their homes on the market. That's more than double the percentage from the previous quarter.
"Of course home sellers are worried about interest rates, but the reality is that many buyers believe that rates will continue to go up," said Eric Tan, a Redfin Los Angeles real estate professional. "They know if they don't move now, they might be kicking themselves all over again in three months."
Eighty-five percent of respondents said they believe home prices will rise in their areas within the next year. Seventeen percent said they expect the rise to be "a lot."
"Results from our seller survey point to growing confidence in the U.S. economy and recognition that broad economic gains could erode sellers' advantages in the housing market as mortgage rates rise," said Ellen Haberle, a Redfin economist.
Home owners identified a "life event" as their top reason for selling, followed by "rising prices," according to the survey.
Rising Mortgage Rates Show Impact
Blunting the Effects of Rising Interest Rates
Liz Lewis Sandwick grew up in Duluth, is married to her husband Robb, has three kids: Caroline (5) Cooper (3), and Max (1) and would love to help you find your next home!