FED CHAIR SAYS MORTGAGE RATES TO GO UP
Federal Reserve Board Chair Janet Yellen recently stated that mortgage interest rates will “probably” go up in the next two or three months. That means those potential homebuyers sitting on the fence had better make a decision to jump down and buy a home now.
Just a quarter point or half a point on the mortgage interest rate will make a major difference on the size and location of the home your family may want to buy. The rates are still at record lows, but now is the time to call a local lender and get prequalified for the home of your dreams.
One piece of good news for the Visalia, Tulare and Porterville housing market came this week. Housing Secretary Julian Castro, addressing the National Association of Realtors (NAR) Regulatory Issues Forum, Housing and Urban Development Secretary Castro said he believed that Millennials are “just as committed” to homeownership as previous generations. That is contrary to the widespread belief that the members of the younger generation are not interested in owning a home.
Castro cited a recent survey from TD Bank which found that 40 percent of Millennials plan to buy their first home sometime during the next year.
“The American dream of homeownership is as strong as ever,” Castro said. “And perhaps the best news of all is that Millennials are showing that their generation is just as committed to homeownership as their parents and grandparents.”
Student loan debt has been the main obstacle to Millennials buying a home, according to Castro. About 40 million Americans have some amount of student loan debt, and about 70 percent of students graduate with student loan debt. He said the amount of average student loan debt at graduation spiking by 56 percent from 2004 to 2014. The increase has been so great that it has actually caused a role reversal in some families. Castro said many of the parents and grandparents of Millennials are shouldering that student loan debt, and now 20 percent of Millennials provide some type of financial assistance to their parents and/or grandparents.
Things are getting better, however, according to Secretary Castro. The number of delinquencies on student loans is declining, and economic improvements have resulted in the creation of 14.5 million jobs over the last 24 months. The average hourly wage is up, having risen by 14 cents over March and April, and the current unemployment rate of 5 percent is the lowest it has been post-recession.
Castro believes the housing market is a part of the nation’s overall economic strength. So do we.
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