By The Kent Redding Group
AUSTIN, TX. - Are you planning on buying or selling a home in Austin? If so, now is the perfect time because mortgage interest rates have reached a 7 year high and with summer right around the corner it's likely that we're going to see more rate increases this year.
How far can interest rates increase? It's anyone's guess. Thankfully, mortgage interest rates haven't even come close to where they've been historically during the last 15-30 years but a rate increase of .5 or 1 percent can mean a higher monthly payment and more money paid overall during the term of a 30 year mortgage.
The average rate for a 30-year fixed mortgage jumped to 4.61 percent, up from 4.55 percent last week and the highest since May 2011, Freddie Mac said in a statement Thursday. And homes that sold last month went under contract after a median of 36 days on the market — a record speed in data going back to 2010, according to a new report by brokerage Redfin Corp.
“This is what happens when the economy is strong,’’ Sam Khater, Freddie Mac’s chief economist, said in a phone interview. “All the higher-rate environment does is it either causes them to try and rush or look at different properties that are more affordable.’’
The solid data boosting confidence in the economy have sent benchmark Treasury yields soaring, and home buyers — encouraged by income growth and low unemployment — are rushing to lock in loans before borrowing costs climb even higher. With a short supply of listings, the increased competition is only making their purchases harder to afford.
Home prices jumped 7.6 percent in April from a year earlier to a median of $302,200, and sellers got a record 98.8 percent of what they asked on average, Redfin said Thursday.
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To get started with searching for a home in Austin, or to speak with us about selling your home, contact the Kent Redding Group today by calling us at (512) 306-1001 or click here to connect with us online.