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Will Mortgage Rates in Austin, Texas Go Up in 2014?

duskAccording to experts, Austin is poised to continue its period of growth in 2014. After completing the most successful year in almost a decade, Austin real estate professionals are preparing for rising house prices and more movement than ever as homeowners begin the process of selling old homes and buying new ones.

Austin is a growing, thriving metropolis, with a declining unemployment rate and access to jobs and amenities. With an interest rate that’s competitive with the rest of the country, Austin is a great market for both homebuyers and sellers.

Interest Rate Outlook

mortgagesFor a 30-year fixed loan, most Austin residents are facing rates starting in the 4.125% APR range. According to Zillow, Austin will likely see housing prices rise, as demand begins to outpace supply for the first time in years.

Erin Lantz, director of mortgages for Zillow, believes interest rates will hit 5% for the first time in 2014, both in response to the recovering economy and policy changes being put in place by the Federal Reserve. Because the economy is expected to continue its slow, but steady recovery, this means that 2014 might be the best time in the near future to make a new home purchase.

Getting a Loan

Consumers generally have an easier time securing a mortgage when interest rates are higher. For that reason, as the interest rate climbs, banks are expected to loosen some of the restrictions they have put in place in recent years in order to win new customers. However, Austin banks will still be more strict in their requirements than they were before the housing crash.

Still, for Austin homebuyers with stellar credit, a steady income, and a good down payment, the tighter restrictions should merely mean more paperwork. The best move for a potential homebuyer is to ensure all of these items are in place before beginning the process of shopping for a new home.

Now or Never

According to estimates by the Financial Forecast Center, the national interest rate for FHA loans is expected to hold steady in the first half of 2014, with the national FHA rate averaging 4.43% by June. This is lower than 2011 numbers, but higher than the lows experienced the last couple of years.

With Austin being such a hot housing market in 2014, area residents might find it’s the prime time to begin shopping for a house. The shortage of available homes for sale in 2013 had many buyers regularly engaged in bidding wars over homes. As the market opens up and more homes are available, buyers might find they are more able to find a home within their price range than they have been in recent years.

Sellers and lenders are also in a great position. With Austin’s rapidly growing population and dropping unemployment rate, this spring and summer will likely bring out more interested home buyers than ever. Throughout this process, interest rates and home prices are expected to remain steady, which makes this the ideal time for home buyers to make that move they’ve been putting off for the last few years.

For more information on obtaining a home mortgage in Austin, Texas contact The Heyl Group at Keller Williams today!  Austin’s top Real Estate team is here to assist our clients in any way possible check out for more information.

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