It only stands to reason if there is no increase in home interest rates in the balance of 2015 there is a strong probability there will be one or several increases in 2016. It doesn’t mean the hikes in current mortgage rates will be significant but may come in small, incremental amounts over time.
The Effect of Rising Mortgage Rates on Housing Markets
The big question is “Will any increase in the interest rate dampen the housing market which is finally recovering in so many cities?” Of course there will be some markets that will feel the effect more than others. Some buyers may suffer more from a psychological standpoint rather than the actual impact the increase will have on their monthly payment. Just the sound of rising interests can cause some buyers to retreat into a wait and buy later mode.
Austin, TX has been red hot for 7 years! They’ve taken the lead in the country in employment, quality of life and affordable housing. With an enviable unemployment rate of 3% it’s not a wonder Money Magazine anointed Austin with the #1 city for 20-24 year olds.
Austin home buyers have been gobbling up residential real estate like its candy! They’ve been able to buy “more house” because mortgage rates have been so low. Investors pick over the less than desirable homes, update and flip at handsome profits.
Because of the anticipated rise in mortgage rates we are seeing a flurry of buyer activity trying to secure a home to close by the end of 2015. There is no question some buyers feel they could get caught on the edge of qualifying for a loan if they wait and might have to settle for less house and making a larger down payment. The lower-income and first time home buyer will feel even a small rate hike more than others.
We are spoiled. Low mortgage interest rates have been around for so long making purchasing a home affordable to so many. It’s a shame there are buyers still holding out for lower rates and/or lower prices and letting the road to homeownership come to a dead end.
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Dorie Dillard, Realtor-Canyon Creek- NW, Austin TX Homes For Sale
Coldwell Banker United Realtors
Office (512) 346-1799