Interest Rates: Westchester County
Firstly, thank you Mark Fisher from United Northern Mortgage Banking for sitting on a conference call with me and updating me on the Mortgage Market so I can keep my clients informed.
The feds have predicated about three interest rate hikes in 2017. So far, there has been one hike in the first quarter, yet the interest rates are still close to an all-time low.
The feds do not decide directly to raise the interest rates. They actually only establish a Federal Reserve requirement, which has a direct relationship to current interest rates. If the Federal Reserve requirement (or the cash on hand banks are required to have) increases, this has a direct relationship on the interest rates, as banks are required to have more cash in reserve, ultimately leaving them with less cash to lend and use freely.
After the market crash in 2008, the banks exhibited a lot more precaution before lending. The FICO requirements, debt to income, and employment history requirement became much more stringent on buyers in the market. In 2017, we are learning that many banks are loosening up their requirements, although by no means returning to “no doc loans” which were prominent in the early 2000’s as banks were issuing loans without requiring nearly any documentation from the purchasers.
Current Interest Rates
According to Mark Fisher, on average for a 30 year fixed loan you are looking at approximately a 4.125% interest rate, more or less depending upon your personal financial criteria. For a 15 year fixed loan, you are looking at a 3.375% interest rate, also flexible based upon financial criteria. Despite a nominal rate hike earlier this year these interest rates are still very low from a historical perspective.
There has been much discussion as to the impact another rate hike will have on the market. Speculation is that an even greater sense of buyer urgency will be created to purchase a home, although many people may be knocked out of the market in the New York Metropolitan area as affordability is becoming a problem as low supplies of inventory are causing prices to continuously rise.
Nonetheless, if you have the down payment and steady employment, we think it a great time to purchase, as interest rates will probably not get substantially lower and may at some of the lowest we will ever see them.
As always, if you are thinking about buying or selling real estate in Westchester County, give Frank Morris a call today!