Last week, an?article?in the?Washington Post?discussed a new “threat” homebuyers will soon be facing: higher mortgage rates. The article revealed:
?The Mortgage Bankers Association expects that rates on 30-year loans could reach 4.8 percent by the end of next year, topping 5 percent in 2017. Rates haven?t been that high since the recession.?
How can this impact the housing market?
The article reported that recent analysis from?Realtor.com?found that
??as many as 7 percent of people who applied for a mortgage during the first half of the year would have had trouble qualifying if rates rose by half a percentage point.?
This doesn?t necessarily mean that those buyers negatively impacted by a rate increase would not purchase a home. However, it would mean that they would either need to come up with substantially more cash for a down payment or settle for a lesser priced home.
Below is a table showing how a jump in mortgage interest rates would impact the purchasing power of a prospective buyer on a $300,000 home.
If you are considering a home purchase (either as a first time buyer or move-up buyer), purchasing sooner rather than later may make more sense from a pure financial outlook.?For more information, please contact The Olear Team today!