Who Will Feel The Small Hike of Mortgage Rate More Than Others

Lower Mortgage Rates and Application

For the past year everyone has been speculating on rising mortgage rates! Economists have danced around the subject because there has been no clear direction as to when interest rates are going to increase. Even now as we are well into the fourth quarter of 2015 still no rate hikes.

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.

Also See

Dorie Dillard, Realtor-Canyon Creek- NW, Austin TX Homes For Sale
Coldwell Banker United Realtors
Office (512) 346-1799

Comments

Submitted by Michele Holland (not verified) on
A small increase in rates will spur more buyers to make up their minds to get out there an purchase a home. An increase in buyer activity will encourage sellers to get their properties on the market. More to choose from. So that will hold the prices. That is what happened in 2011 around here. Bring it!

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