With mortgage rates rising since the election, homebuyers and sellers are asking what the rate hike means for them. 
Del Coronado Realty, a
boutique real estate brokerage in Coronado, Calif., sat down with a local Mortgage Banker and Branch Manager from CMG Mortgage in Coronado for a brief Q&A session on current interest rates and the outlook for the foreseeable future.
How Much Have Mortgage Rates Risen?
In December 2016, shortly after the election, the Federal Reserve hiked rates for the first time since December 2015. The 0.25 percentage point increase, coupled with the surprise election result, pushed mortgage rates over 4 percent. They have since come down slightly, and currently appear to be relatively stabilized between the mid 3s and low 4s, depending on transaction specifics such as loan program, down payment amount, etc.
Why Did the Rates Rise? Will the Trend Continue?
With the stock market performing well since the election and the Dow breaking 20,000 for the first time ever, mortgage bonds have dropped in price. Mortgage rates are priced based on the performance of mortgage bonds. Bonds typically lose when stocks win, and the stock market has had some big wins over the past few months. The general consensus is that the rates will continue to increase, but probably not at an astronomical pace.
Will This Make it More Difficult to Sell My Home?
No. In fact, the situation is quite the opposite. Buyers are very active right now because they want to lock in a mortgage while the rates are still relatively low. If you have been considering putting your home on the market, now is a good time to take action. Not only do you have a larger pool of buyers, but those buyers are also feeling a hint of anxiety and moving swiftly when they see something they like.
Should I Wait for the Rates to Drop Before Buying a Home?
No. Consider where mortgage rates have been in the past. In 2000, they were in the mid 8 percent range, and in 2008, a 30-year fixed rate mortgage was going for about 6.5 percent. While rates don’t appear to be going up tremendously, they don’t appear to be coming down anytime soon, either. Plus, you’re still getting a historically low rate if you lock in today. Those who bought homes in the 1980s will remember paying up to 13 percent! Locking in at the current rate may not get you the very lowest rate in history, but it will be a historically low rate, nevertheless.
Get Expert Real Estate Advice
Del Coronado Realty is here to help you navigate the Coronado and coastal San Diego real estate market in any economic condition. For more information about mortgage interest rates and buying or selling in Coronado, contact us at 619-437-1888.