Alert residential real estate buyers in Oxford!
Alert residential real estate buyers in Oxford!More positive news for residential real estate buyers in Oxford! The National Association of Realtors Pending Home Sales Index, an indicator of housing demand, fell 0.8% in May for the third consecutive decline. Economists are speculating that interest rates are unlikely to rebound to pre-election highs of 4.3% amidst concerns of the new administration triggering more economic growth.
Mortgage rate trends to 10-year T-bill
Mortgage rates tend to follow the 10-year Treasury yields. For this reason, mortgage rates will increase if investors are expecting short-term interest rates to rise due to stricter government policy. Lower rates will lead to an increase in refinancing for current property owners, though after several years of low rates, there may not be as many homeowners who could refinance to a significantly lower rate.
Prime rates are always important to follow as well
The prime rate represents the lowest average rate that banks are offering for credit. The prime rate is the value so that banks can provide interbank lending. They may also offer prime rates to their highest credit quality borrowers. Usually, the prime rate will coincide with trends in the Federal Reserve’s federal funds rate. Historically, this value is approximately 3% higher than the current federal funds rate.
Here is a link to the US 30-year mortgage rate. You can adjust the chart to show more historical data if desired.
Low mortgage rates are a positive for home buyers and sellers
Cheaper mortgages can help bring buyers to the Oxford market by making properties more affordable. Considering the low inventory of all residential real estate in Oxford, this scenario will place sellers in a power position by attracting multiple buyers with financial motivation to buy now.
Homebuyers continue to follow the mortgage rates as it remains one of the most important considerations for purchasing property.