Higher Rates And Higher Rents For 2014

Logo of the Federal Housing Administration. (Photo credit: Wikipedia)

Home buyers and renters will most likely see higher housing costs in 2014. This means that there will be higher rents and higher rates for mortgages.

This year, it is important to note that there will be the implementation of new mortgage regulations that will affect anyone who is applying for a mortgage.

In addition, anyone who applies for a lower down mortgage or a Federal Housing Administration (FHA) mortgage will also experience higher rates for their mortgage insurance.

The FHA has steadily increased insurance premium costs since 2008 and this seems like it will be a continuous trend going forward. The yearly insurance premium for FHA borrowers is 1.25 percent; however there is going to be a 0.1 percent increase to this premium which is going to be spread over the monthly mortgage payments.

UNC Chapel Hill in North Carolina representative, Janneke Ratcliffe shared that once there are higher rates, the small increases will be noticeable.

The job market is poor and the number of foreclosures is high and this causes rental rates to increase. Real estate firm, Reis shared that apartments had vacancy rates of 4.5 percent, which is the lowest in 11 years.

When investors shift from mortgages and treasury bonds, mortgage rates tend to increase and this week shows this clearly. The 5/1 adjustable rate mortgage saw a higher rate of 2.78 percent while the 30 year fixed mortgages jumped to 3.77 percent. The 15 year mortgages moved to 3.03 percent.