People who are planning to buy a house or refinance an existing real estate loan only have a three- to six-month window before mortgage rates increase.
A day after the Federal Reserve announced that they are increasing their interest rates, Quicken Loans CEO Bill Emerson encouraged prospective homeowners to make a move before it is already too late.
"We don't believe that mortgage rates are going to rocket up anytime soon. You have an opportunity here in the next six months to take advantage of still very, very historic low mortgage rates," Emerson said. Likewise, Central bankers also warned that four rate hikes are to be expected next year.
For three decades, the Federal Reserve did its best to maintain the 3.94 percent interest rate. But because the US economy has been showing positive signs of recovery, the Feds decided for a slight raise of 4.09 percent.
"We've seen a little volatility in the marketplace. But you're still seeing mortgage rates pretty much in the same place that they were 30 to 60 days ago. They're pretty much in the same place they were 12 months ago," Emerson noted.
He added that he doesn't see any significant price change ahead in real estate values until 2017. "Any move to 4.5 percent to 4.75 percent or even close to 5 percent doesn't necessarily impact somebody buying a home, because I think rates are still very, very low in the scenario. I think you're going to have to get north of 5 percent for that to start really having an impact on what people can buy and what they can afford," Emerson added.
To date, it has been observed by several experts and studies have shown that the housing market is lagging. First-time homebuyers who typically compose up to 40 percent of the market are currently down to about 31 percent. Despite the numbers, however, Emerson remains positive. He is convinced that the housing market is "getting gradually better."
