Add to the equation that it’s cheaper to buy versus rent everywhere in the country now...I think it’s fairly safe to say that the housing market won’t fall into a decline because of this last little blip on the radar.
New York, NY (PRWEB) June 26, 2013
FinanceSpectrum.com financial advice website today commented on a June 25th, 2013 Business Insider article by Josh Barro, supporting Barro’s predictions for a housing market that will continue to recover despite a massive jump in mortgage rates this past month.
Barro reported in the above-mentioned Business Insider article that the average rate for a 30-year mortgage has climbed up nearly one full point in the past thirty days. He interviewed the chief economist at Trulia, Jed Kolko, for some speculation into how this might affect the housing recovery and the people’s decisions to rent versus buy. Kolko stated that the only major difference he predicts from the mortgage rate increase is that fewer consumers will refinance. According to Kolko, many people expected to see the mortgage rates begin to rise, so it did not come as a big surprise when they did. He is quoted as saying, “Refinancing is a purely financial decision. It doesn’t require making a big move or making a big personal decision about what type of home to live in. Refinancing goes down when rates rise. Home purchasing does not respond as quickly because lots of other factors go into whether to buy a home.”
Finance Spectrum believes that for seniors, refinancing will still be relevant. Even though mortgage rates went up, they still may be lower than a currently possessed mortgage rate. Before a senior dies they should of course tell their counterpart if they had anything like life insurance for seniors or a mortgage life insurance policy. This is not always the case thus, Finance Spectrum believes that obtaining the lowest mortgage rate through refinancing will aid in payments staying at a more manageable rate for the senior who is left behind to handle the mortgage payments.
FinanceSpectrum.com is encouraged by this outlook, and agrees that the housing market should continue to make a recovery. FinanceSpectrum.com is quoted as saying, “Just one look at Freddie Mac’s index of the 30-year fixed-rate mortgages since 1971 will prove that despite the mortgage rates jumping in the last month, they’re still insanely low compared with historic averages. It’s true that everything is relative—so the rates are higher now compared to a month ago, which might seem high since we’re used to seeing them down so much. But in reality, they’re still so low that I honestly can’t see this affecting the housing market’s recovery much, if at all.”
In the above Business Insider article, during Barro’s interview with Kolko they address the rent-versus-buy debate and report that it is still actually cheaper to buy than rent in most every place in the country. Kolko is quoted as saying, “Rates would have to rise to over 10% before renting would be cheaper than buying nationally. Rates have a long way to rise before it really changes the rent versus buy math for most consumers.”
FinanceSpectrum.com believes that since the rates are still historically low, consumers will continue to take advantage despite the recent increase. Their reasoning is that since there’s no way of telling when and how much mortgage rates will climb or fall, consumers must take advantage of low rates when they’re down.
FinanceSpectrum.com is quoted as saying, “Add to the equation that it’s cheaper to buy versus rent everywhere in the country now—including Honolulu, San Francisco, and New York—I think it’s fairly safe to say that the housing market won’t fall into a decline because of this last little blip on the radar.”
FinanceSpectrum.com is an online magazine dedicated to providing advice, tips, and resources about all things related to finance. FinanceSpectrum.com’s topics range from personal finance, to small business finance, to offering tips on how to budget, chip away at debt, save for a wedding, and much more.