As the temperature climbed this past month, so did the interest rates, causing a decline in home sales in Metro Atlanta and surrounding areas. Prior to this, April and May brought more than showers and flowers our way, with interest rates growing for the first time this year.
The summer sun has brought with it a rise in fixed rate mortgages, which rose more than 1 full percent, sending fixed rates over 6%. Despite this, the overall forecast remains bright, with home sales expected to pick back up during the upcoming summer months as the overall economy finally begins to show real signs of a sustainable recovery.
Look for mortgage rates to fall slightly over the next 30 days, then climbing like summer clematis in the sun, by year’s end. In fact, with winter and the end-of-the-year holidays, we may very well see fixed rate mortgages in the mid 6% range.
For the time being, mortgage rates may first take a dip downward as economic indicators remain concerned about previous stalled economic recovery efforts. And, of course, sharply rising interest rates, coupled with the more than $2 per gallon of gas will serve to combat even the best economic recovery efforts. This combination had literally rocked Wall Street, sending the everimportant DOW down over 600 points.
Thankfully, it does appear that the drastic rise in oil prices may be about to end and that OPEC is preparing itself to increase production, which will lower prices. This should cause gas prices to decrease, falling below $2 per gallon by July and falling even further by August, bringing muchneeded relief to us all!
Pair all of this with a FED hike of .25% and another likely .25% hike in August and investors are sure to be more confident in the economy, pushing inflation down to minimal levels, and economic recovery to a strong possibility.
While rates are expected to drop over the next 30 days, they will begin to climb upward throughout the remainder of the year, starting as early as July. Even with rates climbing higher during the later part of the year’s 3
