econintersect .com

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 01 January 2017

Are Mortgage Rates Now Unaffordable?

Written by

In mid-October 2016 the average 30-year fixed mortgage rate was 3.64% and a 15-year fixed at 2.93%!

Now, post-presidential election and based on the fixed income markets belief that the economy is going to improve thus spurring further rate increases by the Federal Reserve, 30-year fixed rate mortgages are on average 4.31% and 15-year fixed at 3.56%.

For the first-time homebuyer who reads about this approximate 70 or so basis point increase in mortgage rates the immediate thought might be that a mortgage, at one point so affordable, has now become unaffordable.

Is this belief actually the case or is it based more on the emotion that if the low in the mortgage rate market had been missed, jumping in now would be the wrong thing to do?

As someone who has been around the block once or twice and seen 30-year fixed mortgage rates in 1980 well above 10% and about 7% in 1994 when I bought my home, the current level of 4.31% is most definitely affordable!

Will the increase in interest rates move some people from qualifying to not qualifying? An upward move is always going to do that but of course there are ways that an experienced mortgage originator can help you through the process.

Hypothetical Look At The Principal An Interest Payments At Various Mortgage Rates For A $500,000 Mortgage!


Bottom line? While no one wants to have to pay more than they might have been able to pay a month or two ago, the reality is that mortgage affordability is still at unprecedented levels.

Another reality is that no one can tell you with any certainty whether in a years time mortgage rates will be higher or lower.

And, while there was no urgency to pull the trigger and buy property over the last few years because it seemed as if economic growth would remain tepid and rates at historic lows, that fact may be changing.

For perspective, look at where mortgage rates have been over the last 45 years:

A Mortgage Professional!

An old adage in finance is that when you don’t need to borrow lenders will be knocking at your door and, when you do need to borrow and you knock on the lenders door, often you find that there is no one home!

That’s why it behooves anyone interested in a mortgage to use a professional who has worked in every interest rate environment and has gotten loans done throughout.

One such mortgage professional is Alan Kreit of Wells Fargo Home Mortgage (NMLSR ID 690784) who helped with the mortgage rate hypotheticals in this article. Alan has been helping his clients for over 20-years and his contact information can be found below:

Alan Kreit

Private Mortgage Banker

NMLSR ID 690784

Wells Fargo Home Mortgage

150 East 42 St., 32nd Floor

New York,NY 10017

Tel 212-214-7534

Cell 516-721-1911

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Opinion Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.

Econintersect Opinion

Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government

 navigate econintersect .com


Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2018 Econintersect LLC - all rights reserved