The Government shutdown stretched until mid October, with a last minute deal reached just before the debt deadline of October 17th. The deal ended the shutdown and equities markets rallied on the news. Home loan rates, which are tied to Mortgage bonds, did move a bit higher during the shutdown, but improved just after the shutdown and the fiscal issues were resolved.
Rates will and have continued on a volatile track as the economy stabilizes. The shutdown was a paralyzing threat which could have stalled or prevented many government sponsored mortgage programs, such as FHA and VA loans.
The government is now funded through mid January 2014, and with the debt limit suspended until February 7.
What does this mean to the housing recovery?
Confidence among U S homebuilders fell more than forecast on October to a four month low, as rising interest rates and the shutdown stifled any housing market progress. Last month, prospective homebuyer traffic reached its lowest level since June, with less homes sold.
What is the bottom line?
Borrowing costs for homebuyers have been rising since May. This is still lower than August, when rates reached a 2 year high.
At the same time, home buyer demand has outpaced the number of homes on the market, driving prices up.
Despite these increases, home loan rates remain attractive compared to historical rates. It is a good time to sell your home, if you have been considering a sale. An appraisal before listing to be sure of your home's value, will help in your decision.