There’s increasing evidence that those waiting around for Orlando real estate to hit bottom are not only going to miss the mark, but will also be trading minor potential price drops for increased monthly payments as interest rates soar.
While most economists seem to agree that bottom is here, the storm cloud on the horizon is that mortgage rates have been moving up – fast. Bailout money will cause inflation and interest rates can’t stay low for much longer. And if you’re waiting around to save $5K here or there on price, those gains could be more than wiped out by increases in interest rates.
As Kenneth Harney said: “No one can predict precisely how high rates are headed, but in the past two weeks they’ve jumped by more than a percentage point. The Mortgage Bankers Association reports that last week alone average 30-year fixed rate jumped to 5.6 percent from five and a quarter the week before. Some analysts project rates to hit and surpass the 6 percent mark if current trends continue. Bottom line: Given that house prices have turned around, and interest costs are soaring, value-conscious shoppers need to get their contracts and loan applications in – quick!”
The truth is that some ofÂ our “perfect storm” variables are evaporating. The $8K tax credit expires at the end of this year, prices appear to have bottomed out in Orlando and interest rates are on the rise.