Chicago, IL (PRWEB) July 22, 2013 -- The National Association of Realtors (NAR) reported today that existing home sales took a dip in June by 1.2%. While homes sales may have declined The Federal Savings Bank expects prices to continue higher.
"Price should keep climbing as inventories remain low and interest rates continue to rise," says Nick, a banker at The Federal Savings Bank. Indeed, Fed Chairman Ben Bernanke implied plausible rate hikes after he told congress the Fed would take "additional action" if mortgage-rates rose further. Mortgage rates have been rising at an unsustainable pace for the past 2 months reports the Wall Street Journal stating "mortgage rates, which at the beginning of May stood at 3.59% for the average 30-year fixed-rate loan, jumped to 4.68% during the first two weeks of July."
Apart from interest rates, a lack of first-time homebuyers may be causing some shortage in home sales. The NAR reported that first-time homebuyers accounted for 29% of property purchases in June whereas it was 32% in June 2012. Lawrence Yun, NAR chief economist said "first-time buyers should be closer to 40 percent of the market, but they’re held back by the frictions of tight credit and very limited inventory in the lower price ranges in most of the U.S." One may recognize that inventory is getting tight as sales of foreclosed/short sale homes made up only 15% of total sales in June compared to 18% in May.
"As unemployment continues to decline we should see both credit standards decline and incomes rising proportionately with mortgage rates," says Nick at The Federal Savings Bank. "This way more potential lien holders will be able to obtain a mortgage in whihc they can afford the monthly payment. Ronald Peltier chief executive of HomeServices of America Inc. says the current rise in rates is "putting people on the sidelines that were really at the margins of being able to qualify."
The decline in existing home sales will probably be temporary, as unemployment declines and incomes rise, mortgage rates will continue to rise. The trend in unemployment is down with rates on the incline. The time to lock in a mortgage while home prices remain affordable is now. To get started on a home loan application please visit: TheFederalSavingsBank.com
The Perfect Mortgage Experience, The Federal Savings Bank, https://www.thefederalsavingsbank.com, 855-686-3883, [email protected]