Real Estate Matters with Tim Bro
The No. 1 Factor Shaping the 2017 Housing Market
Rising mortgage rates will have a huge impact on the housing market in 2017, limited housing supply and shifting demographics will also affect the market.
Increasing rates, affect both sides of the transaction—as rates increase, homebuyers become further extended, while sellers hold off on listing to avoid a higher-priced mortgage when they buy. The experts surveyed expect the most significant changes to come when rates reach 5.5 percent. According to Freddie Mac, rates currently are in the neighborhood of 4 percent.
Rising mortgage rates, inventory shortages and demographic shifts will be the main drivers of the U.S. housing economy this year, especially for first-time buyers who will face tougher competition for entry-level homes and often operate with a tighter budget than move-up buyers. When you combine higher mortgage rates with increasing home prices, mortgage affordability starts to suffer, and buyers will have to spend more and more on their monthly payments. This makes it even more important for buyers to completely understand their finances, and shop around to make sure they are getting the best possible rate.
When Real Estate Matters, call Tim at 858-354-2354, “The Right Choice in Real Estate”. BRE #01224576