This week, the Federal Reserve announced that Quantitative Easing (QE) will end this month. QE was an unconventional monetary policy whereby the Fed purchased government and mortgage bonds in order to increase the money supply and keep interest rates low, in an effort to stimulate the economy.
With this recent announcement, many industry experts are predicting higher interest rates in the near future. Mortgage rates shouldn’t go up drastically overnight, but the Mortgage Banker’s Association predicts that interest rates will rise to 5% by the end of 2015.
So, if you’re a buyer who has been on the fence about buying a home and applying for a mortgage, you may want to take advantage of these unprecedented low interest rates before they are a thing of the past.
You may want to discuss your options with your Realtor, your accountant or financial planner, and your mortgage lender to see if a new purchase fits for your unique set of circumstances.
Take the opportunity to ask these professionals how interest rates will affect the housing market. What are the current trends in the housing market? How do your personal short-term and long-term goals fit into the mix? Don’t be afraid to ask for an opinion.