The rising mortgage interest rate is a great concern to many prospective homeowners. As at December 2016, the average interest rate for a 30-year fixed mortgage in the US rose from 4.13% to 4.16%. This meant that buyers would be paying more, in comparison to previous years. Luckily, the interest rates have not surpassed the 5% mark, as was the case in the early 90s. Potential homebuyers should therefore not panic about the current trends, as the interest projections look good for them.
What is happening with SC Mortgage Interest Rates?
In South Carolina, the average 30-year fixed mortgage rate increased from 3.72% to 3.73% as at May 2017. However, the rate for some financial lenders stood at 4.331%, with the lowest rate averaging 3.65%. Financial experts suggest that the rates will rise even further in 2017, but will not surpass the 5% mark. This is in view of the new administration at the White House, with some of the new policies causing ripples in the financial markets.
Why are the rates rising?
Inflation has a great bearing on the current interest rates, not only in the US but also worldwide. It leads to the increase in prices, as purchasing power declines. In the US, the current inflation rate as at May 2017 stands at 2.2 percent. This means that lenders have to increase their interest rates to prevaricate the effects of inflation on profits. Consequently, the new developments are passed on to the mortgage rates, resulting in high home prices.
• Bond Rates
Bond rates directly affect mortgage rates in the sense that as the treasury rates rise, so does the interest rates. When banks offer borrowers a loan, they are guided by the rates that they receive from the government. If the bond rate is on the higher side, it becomes imperative for lenders to increase their interest rates, in order to balance the books.
• Supply & Demand
The laws of supply and demand dictate interest rates. If the demand is low because of low supply of housing, then potential buyers borrow less. This results in lenders lowering their interest rates. On the other hand, a high demand for housing leads to a higher demand for mortgages. Consequently, it results in the increase in mortgage rates. The demand for housing has been on the increase lately, especially in South Carolina. This has led to an increase in mortgage rates, as lenders cash in on the high demand.
So What should homebuyers do?
Myrtle Beach in South Carolina hosts a number of homes for sale including Oceanfront condos to vacations homes. Homebuyers looking for houses for sale in Myrtle Beach should not panic at the increasing mortgage rates. Coldwell Banker Chicora Advantage, one of the leading real estate companies in Myrtle Beach, South Carolina, and can point you in the direction of how to obtain a mortgage that fits your budget. For more information on the financial options available, please do not hesitate to contact your nearest Coldwell Banker Chicora Advantage office.