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Mortgage rates are on the rise

RatesFrom roughly mid-spring to now mid-summer, mortgage rates have moved up approximately half a point, which is a big move in the mortgage industry.

Recent job gains in June have exceeded analyst expectations, raising expectations that the Federal Reserve will follow suit with a rate increase.

It is now expected that the Fed will begin to raise short-term rates for the first time in approximately eight years in September 2015.

The expectation has a lot of people wanting to purchase this year to lock in that low rate for the next 15 to 30 years.

I have also has quite a few customers who have wanted to refinance their mortgage to take out money for different reasons (home improvement, education expenses etc.) also in an effort to lock in these low rates.

My realtor friends have also pointed to better-than-average sales due to a better economic environment and low interest rates.

The Fed could look to be patient and not raise rates come September. This will depend on the current and future economic data that the Fed will be looking at very closely.

There is also another big factor weighing on the minds at the Fed and that is if Greece will be kicked out if the Euro and the European Union. There have been problems with Greece for more than five years, and if Europe finally throws up her hands and says that’s enough, then we could see world markets become very volatile. This single event could tie the Feds hands in terms of raising rates in September or possibly even this year.

Let’s strap on our seatbelts because it could be a wild ride the rest of the summer.

To contact me, call 773-557-1000 ext. 15, e-mail ron@ronmortgage.com or visit www.ronmortgage.com.

 

About Ron Ricchio

Renato (Ron) Ricchio is president of Chicagoland Home Mortgage. He grew up in Westchester and attended St. Joseph High School and DePaul University, taking a job as a loan officer in the mortgage industry soon after graduating with a bachelor’s in finance in 1991. He started his own company in 2001, which he operates today. He has been ranked in the top 150 loan originators in 2010 and 2011 by Origination News. Ron is happily married with three beautiful children. A board member of San Francesco Di Paola Society and the founder of Ricchio Family Toy Drive for Lurie’s Children’s Hospital, he enjoys cooking and spending time with family and friends.