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Fed Rate Hike? Whatever, Mortgage Rates Are Already Up

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The surge in mortgage rates since the November election is expected to offset the increase to lenders’ short-term funding costs following the Federal Open Markets Committee’s 25-basis-point increase to the federal funds rate Wednesday.

The federal funds rate doesn’t directly affect the interest rates that borrowers pay on home loans, as mortgage rates are benchmarked against longer-term 10-year Treasury yields. But depository and nonbank lenders are both expected to see their short-term funding costs go up, albeit in different ways.

“Anything that’s a warehouse line or something like that is going to go up in price,” said Brent Nyitray, director of capital markets at iServe Residential Lending in Stamford, Conn.

For banks, the fed rate influences their cost of funds for the deposits they use to fund mortgage originations. Likewise, the warehouse lines of credit that independent nonbanks use to fund their pipelines until loans can be sold to end investors are pegged to the London Interbank Offered Rate or the prime rate, which are influenced by the fed funds rate.

But the increase in that short-term rate isn’t so much a concern as long as it’s offset by a rise in the long-term rates most mortgages have. The average interest rate on 30-year mortgages has gone up nearly 60 basis points since the week before the election.

The rise in mortgage rates is enough to offset the increase in short-term rates, plus warehouse lines are not a big cost for mortgage lenders, said Charles Clark, director of mortgage warehouse finance at EverBank.

“I don’t think there’s going to be a big effect on mortgage bankers at all. You’re moving the goal posts, essentially,” he said.

But if the curve between long- and short-term rates or yields were to flatten, lenders would feel their margins slightly pinched by higher funding costs.

“It would really hurt everybody if the curve flattened because the cost of funding would go up relative to the note rate on the loan,” said Tom Millon, president and CEO of the Capital Markets Cooperative, a subsidiary of Computershare.

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3 Reasons To Buy Bend Oregon Real Estate After The Start Of The New Year

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By The Deb Tebbs Group

BEND, Ore. – Are you planning on buying Bend Oregon Real Estate next year but can’t decide if you should buy a home after the start of next year or wait until the spring?

Although many people will typically wait until spring or summer to buy a home, you should buy a home after the first of next year for these 3 reasons.

#1 – Mortgage Interest Rates Are Increasing

Right now we still continue to have historically low mortgage interest rates but that could change in 2017 as many people, including President-Elect Donald Trump, are calling for the Federal Reserve to raise interest rates. If you want to save potentially hundreds of dollars per month off your mortgage payment you should get pre-approved for a mortgage loan soon, and buy a home no later than after the first of next year to avoid paying a higher mortgage after a rate increase.

#2 – A New President Of The United States

Under President Obama, we’ve enjoyed a remarkable period of sustained growth in the Real Estate market but that could change in 2017 as Trump has made his feelings clear about reforming the tax code, Dodd-Frank Act and possibly FHA mortgage loans. These are all ample reasons why any buyer who has a stable job and has saved money for a down payment on a home should buy a home after the start of next year before changes to the Real Estate market could make buying a home unaffordable for them.

#3 – New Homes Available

Thanks to the growth of the Real Estate market we have many new homes available in Bend and communities across Central Oregon like Sunriver, Redmond, and Prineville so if you like the idea of buying a brand new home that’s move in ready, and won’t need any work, now is the right time for you to buy a home in Bend Oregon.

Besides the reasons why you should buy a home after the start of the New Year, you should also seriously consider buying a home if you’re renting because, rents are only going to continue increasing in 2017 and it’s possible that you could see an increase of 2% or more but, you can finally end the “see-saw” ride of renting when you purchase Bend Oregon Real estate.

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To learn more about why you should buy a home after the start of the year, or to view homes for sale in Bend, contact the Deb Tebbs Group today by calling us at (541) 323-4823 or click here to connect with us online.

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How Will A Trump Presidency Affect The Real Estate Market?

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By The Deb Tebbs Group

BEND, Ore. – It’s been one week since the world learned that Donald Trump will be elected the 45th President of the United States and now that the fears of how a Trump Presidency will affect the stock market have died down most people want to know how his presidency will affect the Real Estate market.

Mortgage Interest Rates

As we get closer to the end of the year it’s likely that we won’t see any changes in interest rates since Federal Reserve Chair Woman Janet Yellen has been hesitant to raise rates.

Come 2017 however interest rates could change since Donald Trump has been critical of the Fed’s policies, but in reality, only time will tell if there’s going to be a significant rate increase or not since the health of the economy is tied to the Real Estate Market.

Home Prices

In Bend, the median home price right now is $355,200 and we can expect home prices to continue rising through 2017 thanks to a strong economy in Central Oregon, especially in construction and the tech markets, which have brought more jobs to the area in the last two years.

Nationwide the median home value is $189,400 (Source – Zillow) and home prices are predicted to increase by another 2.9% next year.

What Are The Coming Changes To The Real Estate Market?

During the 1 ½ years that he spent campaigning, Donald Trump advocated making major changes to the U.S. Financial system including simplifying the tax code and eliminating the Dodd-Frank Act, and these changes could help home buyers, but until he’s elected President of the United States we can only wait to see what his focus will be during the first year of his presidency.

Search for Homes in Bend Oregon

To get started with searching for a home in Bend Oregon contact the Deb Tebbs Group today by calling us at (541) 323-4823 or click here to connect with us online.

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