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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Sep 5, 2013

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Mortgage loan interest rates remain high this week according to Sept. 5, 2013 rate reports provided by loans.org. Despite recent increases, real estate agents urge consumers to take advantage of the rates now before they grow further.

This week the 30-year fixed-rate mortgage averaged 4.51 percent, an increase from 4.39 percent reported last week.

Over the past three months, the 30-year fixed rate has risen from the high 3’s to the mid-4 percent ranks. Sam DeBord, managing broker of seattlehome.com, said that although the current rate is still low, the increase represents a large change in the monthly mortgage payments for borrowers.

“We have our mortgage partners calling back potential home buyers and updating them on the changes in what they qualify for to get them off the fence,” he said.

Although buyer’s payments have increased about 15 percent during the summer, DeBord predicts this could double in the next year. He said potential homeowners are not thrilled by the shift, but they are educating themselves about how mortgage loan interest rates impact their buying power.

“They’re much more motivated to get into a home while rates are still very reasonable,” DeBord said.

The second rate change reported this week is the 15-year FRM. It averaged 3.47 percent, a small shift upwards from last week’s rate of 3.38 percent.

Finally, the 5/1 adjustable-rate mortgage shifted from 3.15 percent to 3.23 percent this week.

Several aspects have improved in the housing market over the summer. First, home inventory has expanded. DeBord said that although he expects the number of available homes to increase during the fall season, new buyer motivation has inhibited the trend. Inventory rates in Seattle, DeBord’s local housing market, have grown from 1.5 months to three months of availability.

“That’s still a constricted market of available homes, as we’d usually see around five months in a balanced market,” DeBord said.

Another expert believes the housing market is strengthening on almost all levels including employment, construction and housing demand. But one event surpasses all the others in importance.

Bruce Taylor, President for ERA Key Realty Services, believes the Fed announcement about reducing bond purchases created the biggest impact on the housing market this summer. Although the tapering plan has not occurred yet, the notification alone was enough to increase the mortgage loan interest rates.

“As long as the market itself thinks that the Fed will taper, the rates will change,” Taylor said.

He does not believe that events, such as a potential war in Syria, will impact housing nearly as much as the Fed announcement did. In a year, Taylor predicts that the 30-year rate will be around 5.5 percent, but that the next six months will not bring large changes.

“I think we already swallowed the biggest change for this year,” he said.