Wednesday, October 1, 2014 / by Fra Jamir
Local homeowners are among the keenest observers of town mortgage rates because they are such a large factor in the long-term investment that is their house. It’s the factor that determines if and when refinancing makes sense; the factor that plays a large part in heating (or cooling) the overall Charleston real estate market.
For the most part, home buyers simply accept the mortgage rate in Charleston, SC that happens to be currently offered when they decide buy a Charleston home. The timing of their purchase is generally triggered by their own financial fortunes, or when the right home comes along, or when some outside circumstance forces them to find new digs—or any of a dozen reasons other than the current Charleston mortgage rates.
If they even consider how Charleston mortgage rates come into play, they may look to financial experts—but only for guidance in how to land the lowest available rates (and that answer is always the same: “protect your credit score”). Few consider whether a mortgage rate dip should in itself be the determining factor for triggering their home purchase—but it wouldn’t be such a crazy idea.
So, why do I bring this up now? Let me quote the way Tim Logan, the housing and residential real estate columnist for the L.A. Times, led off his article at the end of last month:
“If you’re borrowing to buy a house, there’s
almost never been a better time to do it.”
He and other residential market observers are not just pointing to the surprisingly low national interest rates reported by Freddie Mac—although that’s certainly the case. Per the Times: “Interest rates on an average 30-year fixed-rate mortgage hit 4.1% this week, a low for the year.” Only last year, the basement-level interest rate phenomenon was widely predicted to come to an end (and rates did begin to rise). But as Logan described it, rates have “been bouncing in the low 4% range for months, not quite record territory, but not far from it.” (I’ll echo that: at this point, they’re close to as low as they ever get.)
But perhaps the most compelling reason for the urgency in that “never been a better time” statement is this prediction (also from the L.A. Times):
“…fairly soon, forecasters say—interest rates
will rise, posing housing-market hurdles.”
The “hurdles” would be a natural consequence of any upward spike in mortgage rates. In that scenario, homeowners will become reluctant to part with their own home since a new mortgage would carry higher interest rates. Not just that: if that causes the supply of homes on the market to tighten, prices will do what supply shortages always cause—higher prices.
Such a scenario is far from certain. But what isn’t in doubt is today’s decidedly low Charleston, SC interest rates. If all this has you thinking of buying or selling this fall, as the Times says, your timing couldn’t be better…an excellent reason to give me a call me today!
Jeff Cook Real Estate