Will rising mortgage rates swamp housing market?
Don’t look now, but mortgage rates have been rising fast (well, OK, look).
After hovering around 5 percent for most of the last few months, the average rate on a 30-year fixed-rate mortgage has spiked to about 5.7 percent since the end of May. That’s nationwide. Here in St. Louis, they’re up to about 5.6 percent, according to Bankrate.com.
Does this pose a risk to the slowly reviving housing market? Or will the “green shoots” we’re seeing in the economy these days (which many say are the cause of the higher rates), give home buyers enough confidence to buy anyways? Rates are still pretty low by historical standards.
What do you think?
P. S. I’m newly a-Twitter, and will be posting Building Blocks entries and other stories over there now, too. If you want to follow along, my handle is tlwriter.
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when you print trillions with nothing behind it, eventually the world[china] figures it out that you are worthless. they refuse to buy our junk 10 year bond and rates go up!!! I am glad the governmnent has made all these changes they have ,ruined appraisers ,lenders ,and brokers!! I thought the idea was to lend!! this is why all the banks are suddenly paying that tarp money back so the government can’t tell them they have to lend and not to pay their execs 10 trillion dollars for wrecking the banks. i will do it for a fourth of what they charge!! BIG AL in the lou!!
I don’t think it’s rates that are hurting the houseing market, like the aricle says they are still low (historically), it’s the fact that most people have no confidence they will have a job tomorrow.
When the $8,000 first time homebuyer incentive disappears you will see another drop in home purchases. The purchase money mortgages we are seeing are mainly first time homebuyers taking advantage of the “free” $8,000, we are not seeing very many homeowners trading up.