With mortgage interest rates inching up over the past few months, you may be wondering if your chances to purchase or refinance are disappearing.  Are the housing market and mortgage industry headed for another downward spiral? Don’t worry: experts agree that the answer is “Absolutely not.”

The nation’s healthier economy is the main reason for the rise in mortgage interest rates. Rising economic indicators, like job growth, have allowed the Federal Reserve to reduce the bond-purchase program that has helped keep interest rates at record lows. An increase in the demand for home loans is also contributing to rising mortgage rates.

Indicators that the Mortgage Industry is Alive and Well

Rates are still historically low

Although mortgage interest rates are beginning to creep up, they are still at incredibly low levels, especially compared to previous decades.  Take the 1980’s for example: the average interest rate on a home loan hardly ever dipped below 10% and at one point even approached 20%.  So to see rates now beginning to hover in the 4% range should not seem alarming.  Plus, rates are not expected to substantially increase any time in the near future, so there is plenty of time to consider a move or refinancing.

Housing market is growing

The housing market is improving and this trend is expected to continue. Mark Zandi, chief economist for Moody’s Analytics, said that the increase in mortgage rates has not dissuaded prospective buyers from purchasing homes. “Compared with the historical average of more than 6%,” Zandi said, “buyers can live with 4.5% rates.”  And clearly, they are. In fact, economists at Fannie Mae expect 2015 to be the best year for the housing market since 2007.

Homes still very affordable

According to the National Association of Realtors, homes are still more affordable than they’ve been in decades — despite increasing interest rates and home prices. The index, which combines the impact of changes in home prices, mortgage interest rates and household incomes, has fallen this year but still stands well above levels that have historically shown slowed home sales.

The bottom line

There are still plenty of great opportunities to purchase or refinance in today’s mortgage lending environment.  While rates may be creeping up from those historic lows we’ve seen over the past few years, they are still in a very attractive range.

Now may be the perfect time to achieve your homeownership or refinancing goals. Click here to contact one of our home loan experts to see how we can help you.