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Why Are Mortgage Interest Rates Increasing?
Why Are Mortgage Interest Rates Increasing? According to Freddie Mac's latest Primary Mortgage Market Survey, the 30-year fixed rate mortgage interest rate jumped up to 3.94% last week. Interest rates had been hovering around 3.5% since June, and many are wondering why there has been such a significant increase so quickly. Why did rates go up? Whenever there is a presidential election, there is uncertainty in the markets as to who will win. One way that this is noticeable is through the actions of investors. As we get closer to the first Tuesday of November, many investors pull their funds from the more volatile and less predictive stock market and instead, choose to invest in Treasury Bonds. When this happens, the interest rate on Treasury Bonds does not have to be as high to entice investors to buy them, so interest rates go down. Once the elections are over and a President has been elected, investors return to the stock market and other investments, leaving the Treasury to raise rates to make bonds more attractive again. Simply put, the better the economy, the higher interest rates will go. For a more detailed explanation of the many factors that contribute to whether interest rates go up or down, you can follow this link to Investopedia. The Good News Even though rates are closer to 4% than they have been in nearly 6 months, they are still slightly below where we started 2016, at 3.97%. The great news is that even at 4%, rates are still significantly lower than they have been over the last 4 decades, as you can see in the chart below. Any increase in interest rate will impact your monthly housing costs when you secure a mortgage to buy your home. A recent Wall Street Journal article points out that, "While still only roughly half the average over the past 45 years, according to Freddie Mac, the quick rise has lenders worried that home loans could become more expensive far sooner than anticipated." Tom Simons, a Senior Economist at Jefferies LLC, touched on another possible outcome for higher rates: "First-time buyers look at the monthly total, at what they can afford, so if the mortgage is eaten up by a higher interest expense then there's less left over for price, for the principal. Buyers will be shopping in a lower price bracket; thus demand could shift a bit."
Mortgage Interest Rates Just Went Up... Should I Wait to Buy?
Mortgage Interest Rates Just Went Up... Should I Wait to Buy? Mortgage interest rates, as reported by Freddie Mac, have increased over the last several weeks. Along with Freddie Mac, Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors are all calling for mortgage rates to continue to rise over the next four quarters. This has caused some purchasers to lament the fact they may no longer be able to get a rate less than 4%. However, we must realize that current rates are still at historic lows. Here is a chart showing the average mortgage interest rate over the last several decades. Bottom Line Though you may have missed getting the lowest mortgage rate ever offered, you can still get a better interest rate than your older brother or sister did ten years ago; a lower rate than your parents did twenty years ago and a better rate than your grandparents did forty years ago.
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November Happenings and Events
  Happenings & Events Veterans Day Third Annual ‘Concert For Heroes’ | November 11th 2:00pm – 10:00pm | Galway Downs, 38801 Los Corralitos Rd, Temecula, CA 92592 The Manzanita Ranch, Inc. is a nonprofit human service agency dedicated to serving the needs of veterans by using horses for therapy. Featuring The Phoenix Patriot Band, Slow Traffic, Michael Thomas and Friends, Tim Walsh, JD Priest, Noizee Neighborz, Shoot 4 Tuezday, The Great Tim Moyer, Neil Young Recording Artist Tom Bray, Lifetime Rockers, The Barnyard Boyz, Jen Householder, Joe Lawing, Off the Vine, Joe Fillaspie, OS Roxx & more! For more information visit: www.galwaydowns.wpengine.com Murrieta Field of Honor | November 8th – 14th 9:00am - Dusk | Town Square Park, Murrieta, CA More than 2,000 full-sized American flags will be set up in perfect rows and columns for the week-long event that also features a number of other activities. It’s a week to pay honor and express thanks. And it’s also a time to educate — visitors to the Field gain knowledge about American history. We learn about our country’s flags, its highest military honor, its war dead. For more information visit: www.murrietafieldofhonor.com Wine Appreciation Class | November 19th 10:00am –12:30pm | Falkner Winery, 40620 Calle Contento Temecula, CA This class is designed for all ages and all levels of wine knowledge. Individuals can expect learn about wine tasting, wine production, wine & food pairing, and wine quality determination. For more information visit: www.temeculaca.gov South Coast Winery Thanksgiving Feast | November 24th 11:00am – 9:00pm | South Coast Winery, 34843 Rancho California Rd., Temecula, CA Spend your day in gratitude and away from the kitchen. Let South Coast Winery Resort & Spa’s chefs and servers take care of your every need, while you sit back, relax and enjoy quality time with your family and friends. Make your reservations early for best selection.   For more information visit: www.southcoastwinery.com Christmas Tree Lighting at the Pond | November 25th 5:00pm –6:30pm | Temecula Duck Pond & Veterans Memorial, 28250 Ynez Rd. Temecula, CA Put the leftovers away and let’s kick off the holidays with the annual Christmas Tree Lighting Ceremony. Enjoy a holiday treat, a visit from Santa Claus and a holiday performance by Resonate! Vocal Group while we wait for the countdown to light the tree. For more information visit: www.falknerwinery.com   Don’t forget to take part in this year’s Presidential election. Every vote counts! November 8th 2016