PAGE 10 LIFE.STYLE.HOMES THE DISPATCH Mortgage Rate Rise’s Impact On Market BERLIN – Home sales are making a comeback. With existing home sales making the strongest showing since 2009, now is the time to act for home buyers and refinancers looking to cash in on what are still historically low rates. Many industry experts expect rates to continue to rise through the end of the year. The average rate on a 30-year fixed loan has gone up over the last few weeks by 0.18 percent, according to a survey conducted by mortgage buyer Freddie Mac. The rate sits at its highest level since July 2011. The 30-year fixed previously hit a two-year high of 4.51 percent in July and has now increased by more than a full percentage point since May of this year. A year ago the 30-year fixed was trending at 3.68 percent. “Nationally the real estate market has recovered to the level it was in 2010 when the $8,000 tax credit went into effect,” said Sheila Dodson, CAR executive director. “Housing inventory is at a 50year low and when there is a shortage of inventory, the first reaction to this is a rise in mortgage rates. Right now we have what is called a home gap. Even though inventory is low, we are not seeing new homes being built because it has been a challenge for contractors to get credit from the banks and regulations have become more stringent. Some sellers have not returned to the market because of the concern about foreclosures bringing prices down which has also added to the shortage in inventory.” First Home Mortgage Branch Sales Manager Ned Delaney reports the rate remains attractive to buyers. “The fixed rate is still very good right now,” said Delaney. “When you consider the retired population now looking to buy second homes paid 17 percent on their first home, three (3), four (4) and five (5) percent is not bad at all.” Sun Trust Mortgage, Inc. Branch Manager and Vice President Jamie Wetzelberger said, “The big climb took place late summer and has since leveled off a bit. As rates are expected to rise again as the market recovers, people should know they can still get in on a five-year fixed rate adjustable mortgage to get the lower rate to qualify to buy. After five years the rate is adjusted but at least they don’t have to put off buying because they can’t qualify under a higher rate.” For example, the 30-year fixed previously mentioned sits at 4.51 percent and two months ago was at 3.6 percent. If a buyer needed the 3.6-percent rate to qualify to buy, they can still get that rate under a five-year fixed rate adjustable mortgage. Some experts say people are still skeptical about using adjustable-rate mortgages because they don’t want people in over their heads when the rate is adjusted. “There are underwriting guidelines (index plus the margin) that prevent this from happening,” said Delaney. “So people will end up qualifying at a higher rate than what the actual rate is so they don’t find themselves not being able to afford their home in five years.” Wetzelberger added, “You also have to consider how increased rates can benefit the homeowner. 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