Posted: 10/07/2016

The housing market remains strong despite the recent rise in home prices.

Freddie Mac’s national Multi-Indicator Market Index (MiMi) value, released in September, indicates strong housing activity thanks in large part to low interest rates.

Freddie Mac Deputy Chief Economist Len Kiefer explained this in a press release:

“Nationally, MiMi in July was largely unchanged for the third consecutive month at 85.1, yet marking a 4.7 percent year-over-year increase. Despite rising house prices, the majority of housing markets have sustained their momentum due in large part to low mortgage rates. For example, purchase applications, as measured by MiMi, were up more than 17 percent year over year in July and remaining at their highest level since December 2007,” Kiefer said.

This may be the perfect storm for homebuyers as home prices are only expected to continue to increase. According to CoreLogic, it is estimated that home prices will jump 5.4 percent by July 2017. Boosting home prices is the fact that inventory remains low, as it has been for most of the year. Waiting for prices to drop is always a gamble as interest rates could increase.

In August, the 30-year mortgage rate sat at 3.4 percent, which put it at the fifth lowest rate in 20 years. What’s more, Freddie Mac recently forecasted that a 30-year fixed rate mortgage could average around 3.6 percent by the end of 2016, which would be a historic low not seen in 40-plus years.

Considering the circumstances, homebuyers may want to purchase sooner rather than later given that there is low inventory, it is a competitive market and interest rates are still favorable.

The best option is to get prequalified or preapproved for a mortgage first. We at Guarantee Mortgage can help guide you through the process. That’s why we encourage you to connect with a loan advisor. The consultation usually takes between 15 and 30 minutes. An advisor will answer your questions, talk to you about the mortgage options that make sense given your finances and find out if you qualify.

Contact us today!

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