Individuals who are contemplating selling a home as a “For Sale By Owner” (FSBO) property need to be aware of the potential impact of mortgage rates on the success of their sale. On March 20, Freddie Mac announced that the average rate for a typical 30-year fixed loan fell to 4.32% (down from 4.37% last week), rebounding to the same level as was reported two weeks earlier. Frank Nothaft, Freddie Mac’s chief economist, attributed this week’s dip to the following industry data:
“Mortgage rates eased this week as housing starts [PDF] declined 0.2 percent in February to a seasonally adjusted annual rate of 907,000, below consensus forecast. The rate on the 10-year treasury note rose following the Fed’s announcement Wednesday afternoon and, if this holds, interest rates may begin to trend higher going into next week.”
Despite the volatility of mortgage rates during the outset of 2014, many experts continue to believe that mortgage rates will move past the 2013 high of 4.58% in (recorded in January 2013 – compared with a low of 3.34% in July). A more detailed breakdown on monthly interest rates for 30-year fixed-rate mortgages (dating back to April 1971) is available on the Freddie Mac website. Given that most home buyers finance their homes rather than pay for the home in cash, Nestseller recommends that homeowners consider the potential impact of mortgage rates on their sales objectives. In this regard, FSBO sellers should continue to monitor Nestseller’s weekly updates to keep apprised of mortgage rate trends, as sustained rate increases could impact the pool of potential buyers and, in turn, the ease and success of the FSBO sales process.