If you wait for lower rates and they never come (or home prices could climb while you wait), you've lost both ways. So, the best question is, "can you comfortably afford the payment now, and do you plan to stay in the home for several years?" If yes to both, buying now is generally a safer plan than waiting on a prediction nobody can make with certainty.
Long-term pension plans and national debt are affecting mortgage rates. Pension plans are natural heavy buyers of long-term bonds. They must match decades-long payouts. Meanwhile, 401K savers mostly buy shorter maturities while pensions shrink and pull back from long bonds. Fewer big buyers means the government must offer higher yields on long-term debt, which keeps pressure on the 30-year (above 5%) and mortgage rates (6.7–6.9%). Net effect: mortgage rates are unlikely to fall meaningfully anytime soon.
There's a real problem brewing in the long-term bond market. Because the government borrowed record amounts (debt has crossed $40 trillion), Treasury yields on long-term bonds have climbed to their highest levels in nearly two decades — the 30-year has been above 5% for its longest stretch since 2007. That matters for real estate because 30-year fixed mortgages are priced off the 10-year Treasury (currently near 4.8%), and the pressure has already pushed mortgage rates to roughly 6.7–6.9%. Analysts say if the 10-year hits 5%, mortgages could climb back above 7%.
When could this hit? The risk is front-loaded: the September Fed meeting (next week) and year-end debt supply are the near-term catalysts. Expect rates to stay elevated for a while.
Mark M. Hancock, GRI, MRP, AHWD
REALTOR, New Build certified
214-862-7212 (call or text)
DFWmark@kw.com
DFWmark.com
#DFWmark #REALTOR #TimeToBuy #BondMarket #PensionPlans #Mortgage
No comments:
Post a Comment