RATE ALERT

Rates took a marked move up this week. Whereas we were at 6.375% on the 30 year fixed only a week ago, we stood at 6.625% this morning, with the market poised to worsen again today.  Whether this is the start of an upward trend, or just an early summer blip, is impossible to predict.  This is however something every potential buyer out there should know and further evidence that the time to buy is now.

It is now clear that as buyers wait for the RE market to “correct”, or keep searching for that “great deal” their buying power is contracting by the day. Sellers also need to be aware that their buying audience is diminishing with every tick up of the interest rates. For any buyer that is continuing to wait for prices to drop, an increase in the interest rate is going to offset a price drop.  It’s a tricky thing and buyers should be thinking in terms of striking while the iron is hot.  Low rates and lots of inventory is their best bet.  They can negotiate now and get the best deal possible and still have a reasonably low monthly payment. 

A further thought would be the potential that with the real estate rates rising, a herd of buyers may now realize that the “bottom has been hit” and they may start moving in larger numbers towards taking action on a purchase.  Should that happen, a buyer will lose some of his power in the marketplace.  Lots of buyers may start the pendulum moving away from them in terms of control.

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