What's Happening in the Real Estate Market?

Welcome back to my video blog. Today I have some special guests with to tell us about what's happening in the market with interest rates, qualifying for mortgages, etc.

Interest rates started off at 3.5% at the beginning of this year. They then dipped down to 3.25%. We are ending 2013 with rates at about 4.5%. We expect rates to increase, though, in 2014. Why?

The Federal Reserve is expected to ease off its bond purchasing - also know as quantitative easing. These purchases help artificially lower interest rates so that more consumers could buy homes. As the economy continues to improve, however, the the chairman of the Federal Reserve announced the tapering off of the bond purchasing.

As rates continue to increase, the purchasing power for buyers decreases. A simple .5% increase can dramatically effect how much you qualify for in a mortgage.

Qualifying Mortgage or QM are also a new thing for 2014. Soon it may be harder for buyers to qualify for mortgages. Why is this?

There are new rules that focus on the ability to repay. One of those test will be the 3% cap. This means that the fees cannot exceed 3% of the mortgage value.

If you have any questions about what's happening in the market and what to expect from interest rates and loans, please give me a call. Thanks for watching!

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