Mortgage interest rates have risen over the last few months and projections are that they will continue their upswing throughout 2017. What impact will this have on the housing market? Here is what the experts are saying:
Laurie Goodman, Co-director of the Urban Institute’s Housing Finance Policy Center:
“In 1984, 1994, 2000, and 2013, every time we have rate increases, we have increases in nominal home prices. We expect this to be more pronounced, as there is a big demand-and-supply gap at the present time.”
Scott Anderson, Chief Economist for Bank of the West:
“The tightening labor market, rising wage growth, high levels of consumer confidence and a millennial generation with a pent-up demand for housing should allow the housing market to weather the storm of gradually rising interest rates.”
Ivy Zelman in her latest “Z” Report:
“Although we strongly believe that the housing supply-demand imbalance for single-family homes will continue to drive above-average home price appreciation, just as falling mortgage rates aided pricing power on the margin in recent months, we expect the opposite effect to become evident in the coming months. As such, we project year-end home price inflation of 4.8% for 2017 and 4.1% for 2018.”
Bob Walters, President & COO of retail mortgage lender Quicken Loans:
“A modest increase in mortgage rates won’t have much of an effect on home purchases. A buyer may need to slightly re-evaluate which homes they can afford, but it’s not likely to make an impact on qualifying, in most cases.”
First American Chief Economist Mark Fleming:
"Our survey data shows that mortgage rates would have to be significantly higher to have any meaningful impact. The house buying power that borrowers have, even with rates below five percent, still remains historically strong."
The experts in the lending industry have spoken! What should be your course of action? Evaluate what it is that you would like to accomplish -- contact THE MILITELLO TEAM if you would like to build a strategy to purchase a new home in 2017 or 2018. Reach out to us and put our 40+ year's of experience to work for you. Call us TODAY!
THE MILITELLO TEAM
Joseph Militello (978) 815-3877
Kathleen Militello (978) 500-1480
Source: Keeping Current Matters