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    Why Have Interest Rates Jumped to a 7-Year High?

    Why Have Interest Rates Jumped to a 7-Year High? | MyKCM

    Interest rates for a 30-year fixed rate mortgage have climbed from 3.95% in the first week of January up to 4.61% last week, which marks a 7-year high according to Freddie Mac. The current pace of acceleration has been fueled by many factors.

    Sam Khater, Freddie Mac’s Chief Economist, had this to say:

    “Healthy consumer spending and higher commodity prices spooked bond markets and led to higher mortgage rates over the past week.

    Not only are buyers facing higher borrowing costs, gas prices are currently at four-year highs just as we enter the important peak home sales season.”

    But what do gas prices have to do with interest rates?

    Investopedia explains the relationship like this:

    “The price of oil and inflation are often seen as being connected in a cause-and-effect relationship. As oil prices move up or down, inflation follows in the same direction.”

    You may have noticed that filling your gas tank has become substantially more expensive in recent months. The average national gas price has climbed nearly $0.50 from the beginning of the year, leading to the highest price for Memorial Day weekend since 2014.

    As rates go up, your purchasing power goes down, but don’t worry; rates are still well below the averages we’ve seen over the last four decades.

    “Freddie Mac said this year’s higher rates have not yet caused much of a ripple in the strong demand levels for buying a home seen in most markets, but inflationary pressures and the prospect of rates approaching 5 percent could begin to hit the psyche of some prospective buyers.”

    Buying sooner rather than later will help lock in a lower rate than waiting, as the experts believe rates will continue to climb. Even a small increase in interest rates can have a big impact on your monthly housing cost.

    Bottom Line

    If you are planning on buying a home this year, keep an eye on gas prices the next time you’re at the pump. If you start to feel a big jump in price, know that rates are probably on their way up, too.

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    Carin Nguyen

    Carin Nguyen takes the business of real estate very seriously and she has the track record to prove it. She holds the recent prestigious title and ranking of the #1 realtor in AZ for sides as awarded by the Wall Street Journal. Carin is an Arizona native and fully understands the complexities and changing landscape of the Arizona market. She has been in the real estate industry for over 10 year’s full time and comes by her expertise honestly, having honed it during years in the finance and mortgage industries. Education and knowledge is key in getting her buyers and sellers what they what. A rich resume built with a tireless commitment to her clients, undeniable proven past success and an uncompromised vision for the future create the recipe for complete customer satisfaction. Carin understands the potential emotional stress and sometimes life altering experiences felt by clients during the real estate transaction process. Carin is unyielding in insisting on complete professionalism from herself and her team while understanding that real estate is a personal business. She thrives on managing the details and individuality of each transaction and client. Her clients know that having Carin on their side means they have an advocate who cares about them and their needs. Carin is convinced that building relationships will ensure continued satisfaction and be reflected in future success. There is no denying what provides Carin with her constant strength. Her family is “at the heart of my motivation to push myself to achieve my goals and to be forthright in all that I do. My husband, Son, is my biggest source of support, my coach and my best friend. I am truly blessed with a loving husband and four great children who collectively strengthen my resolve to be the best at all my endeavors. I can be a wife and mother and still be a successful Realtor because I tackle everything with all that I have. My motto is ‘Working Hard To Get Homes Sold’ for a reason. I am thrilled that so many families have made me their real estate consultant.” A commitment to professionalism, an empathetic and understanding approach to her clients and an unstoppable and dependable force from her family all ensures success for Carin and most importantly, her clients

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