The Impact on Mortgage Rates

With the government shutdown over, at least for the next few days, it might be time to take a look at the impact on mortgage rates.

Rates did surprisingly well during the shutdown, but the true impact of the shutdown won’t be known until the markets have a chance to digest some economic data that did not get reported (because no one was in the office to hit print.)

While most with knowledge don’t expect much movement in rates for the foreseeable future, there are those unknowns in financial markets that could send everything sideways. Waiting to purchase a home to see what rates do is a gamble. Getting in and getting it done now is a good bet.

The message that rates are at the lowest point in about a year seems to have gotten buyers out early — at least in areas where sub-arctic temperatures haven’t made going outside life-threatening. Warmer areas could have seen a surge in people from the upper midwest and northeast just giving up and moving south.

The Impact on Housing Prices

A warm and cozy rate environment could bring us an early spring housing market.

Rising wages and projected continued growth in employment should be enough to offset the affordability issue some potential homebuyers are having, allowing for what is likely to be moderate gains — but decent gains in home prices for the year.

That is, of course, assuming rates remain flat. It’s basically one or the other — rates or prices can go up. The better of the two? Moderate home price increases. Increases in rates will just keep inventory low. As it gets more expensive to move due to rates, current homeowners have less incentive to sell and move up.