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Window for low mortgage rates set to close
Economists predict an impending spike in interest rates could push up home sales.
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Window for low mortgage rates set to close
Many analysts are predicting the Federal Reserve could raise rates as early as next month. If it does, the new rates could have an outsized impact in Southern California, where home prices are higher than in many other parts of the country.
A rise in interest rates would mean bigger mortgage payments, and that may affect anyone who needs to get a loan, according to Ziggy Zicarelli, president-elect of the California Association of Realtors.
"Obviously, the potential for qualifying is more difficult if the interest rates are higher," Zicarelli said.
Interest rates have been at historic lows as the Fed waits for the economy to improve. A solid July jobs report is just the latest indicator that the Fed may act soon.
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"The unemployment rate remains low and there are some signs that wages are again picking up in July," said Michael Fratantoni, chief economist of the Mortgage Bankers Association.
Fratantoni and other analysts predict the Fed will raise rates at its meeting next month. That's not a lot of time for someone to lock in a house at current interest rates. But for someone who already has a lead on the house, it may be the extra push to make a bid, Fratantoni said.
Still, Zicarelli predicts higher interest rates won’t dampen the broader real estate market in Southern California. He said people who want a bigger house or need to move for a job will do so anyway.
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But the game has changed: Congress voted to eliminate funding for public media across the country. Here at LAist that means a loss of $1.7 million in our budget every year. We want to assure you that despite growing threats to free press and free speech, LAist will remain a voice you know and trust. Speaking frankly, the amount of reader support we receive will help determine how strong of a newsroom we are going forward to cover the important news in our community.
We’re asking you to stand up for independent reporting that will not be silenced. With more individuals like you supporting this public service, we can continue to provide essential coverage for Southern Californians that you can’t find anywhere else. Become a monthly member today to help sustain this mission.
Thank you for your generous support and belief in the value of independent news.
Senior Vice President News, Editor in Chief
