Freddie Mac indicates that although interest rates actually fell this week for the first time since the presidential election, dropping 12 basis points to 4.2 percent, it is also the first time since 2014 that they have opened a year above 4 percent. Although it is obviously anybody’s guess as to which direction they’re heading, I strongly believe they are heading upwards.
Prior to this week, they had risen for nine consecutive weeks and ended the year surging upwards. The average for the year was 3.65 percent, being the lowest annual average since Freddie Mac’s index began keeping track in 1971. The 2016 year ended with a 30 year fixed rate mortgage with a .5 point at 4.32 percent.
The real estate market remains hot and is still a Seller’s Market. Eventually rising rates should change this to a more evenly balanced market as buyers will be able to afford less home, providing fewer buyers for sellers. This suggests that if sellers are contemplating selling, they ought to move swiftly before rates rise and limit their available pool of buyers.