November 2016 Mortgage Rate Update

Mortgage rates have been very volatile over the past couple of weeks and now sit close to their peak levels for 2016. This volatility has stemmed in large part from the presidential election, both leading up to the day itself and the forecasts for our economy since the results were decided.

The two main factors leading to the rise in interest rates are the anticipation of inflation coupled with a larger federal budget deficit. Rising inflation increases mortgage rates and a larger deficit would likely trigger an increase in the number of bonds issued, thereby increasing supply & decreasing bond prices, causing higher interest rates which typically have an inverse relationship to bond prices.

While mortgage rates are still at historically very low rates, a continued rise in rates could spur some buyers on the fence to take action and consider moving up timelines for purchases of homes. It’s worth keeping an eye on rates in the near future.

To see a graphical representation of mortgage rate trends, view the most recent Housing Report.

Stephen Woodall

REALTOR, GRI @ Long Realty Company

Stephen has made real estate his full-time career and passion since 2008, primarily specializing in the Foothills & the Northwest Tucson areas of Oro Valley and Marana. He is a multi-million dollar producer, representing both sellers & buyers. Stephen has tremendous experience in new home sales, listing & selling primary residences, listing & selling vacant land, listing & selling luxury homes, investment properties, rentals, and real estate development parcels.