Monica McNamara's Ocean City Blog

After last weeks' spike in interest rates, we thought we would see a pullback.  That was not the case... in fact, rates pushed a bit higher.  Bankrate's national survey had 30yr fixed rates averaging 5.65% and 15yr fixed rates average at 5.06%.
 
Has the mortgage rate boat sailed too far from shore for those still looking to purchase?  Absolutely not!  This time last year, Bankrate's national survey averaged 6.26% for 30yr fixed.  The problem is borrowers become fixated on what they could have had a few weeks ago.  It's irrational to continue thinking that way because there is nothing that can be done to change the situation.  The logical approach is... where do I go from here?
 
NAR (National Association of REALTORS) reports pending sales increased 6.7% in April, the biggest jump in 8 years.  Factory orders rebounded .7% after a decline of .9% the month before.  The U.S. lost fewer jobs than was forecast in May - 345,000 the least in the past 8 months.  All this could be signs that the deepest recession in half a century is abating.
 
The point is...  we should make decisions based on the reality of the current situation forward.  There is nothing we can do about last week's mortgage rates.  We can only consider rates from this point forward... which are still excellent!  The same decision applies to home prices.  Many people who want to sell are anchored to the price at which they bought... even if it has no basis in economic reality.  And the reality is... prices are darn low, which is why we think potential buyers shouldn't wait too long to pull the trigger... lest they suffer the same fate that many borrowers are!

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