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Sign into your accountBrace Yourself for Higher Home Loan Interest Rates in 2017
February 13 2017
Historically low interest rates have finally begun to rise in recent months, and they are expected to continue this climb. How will this affect your real estate selling endeavors in 2017?
Steady incline
Housing and economy experts concur rates are not likely to go back down. Uber-low rates are in the rear view, with 30-year fixed-rates expected to stay in the 4 to 5 percent range by year's end. A rise to 4.5 percent is expected, with the worst-case scenario knocking at the door of 5 percent. This is expected to reduce home sales over the course of the year by about 200,000 homes.
Buyer blowback
As rates climb, buyers may feel pressure to act. At a certain point, their home ownership dream will be stretched to the breaking point, but we aren't there yet. At today's rental rates, mortgage rates would have to be in the 7-10 percent range to equate rental costs.
Cooling "hot" markets
In expensive markets (LA, NYC, Miami) interest rates will push out buyers already struggling to afford homes, even with historically low rates.