How will interest rates affect the housing market

By Jerry Robertson August 14, 2013 News Worthy

Here are a few interesting comments on how rising interest rates might impact the real estate market as we move forward.

Zillow

Dr. Svenja Gudell, Senior Economist

“As long as mortgage interest rates don’t rise too far and too fast, most markets should be able to absorb these changing dynamics while still remaining healthy.”

Fannie Mae

Doug Duncan, SVP and chief economist at Fannie Mae:

“Consumers have taken the interest rate rise in stride. Expectations for continued improvement in housing persist, and sentiment toward the current buying and selling environment is back on track from its dip last month. These results are consistent with our own analysis of previous housing cycles, which finds that interest rates and home prices are not strongly correlated.”

National Association of Realtors (NAR)

Lawrence Yun, Chief Economist:

“Affordability conditions remain favorable in most of the country, and we’re still dealing with a large pent-up demand. However, higher mortgage interest rates will bite into high-cost regions of California, Hawaii and the New York City metro area market.”

Trulia

Jed Kolko, Trulia’s Chief Economist:

“If you were worried about a housing bubble, July’s asking-price slowdown will probably be the best news you’ve heard this year. The asking home price slowdown in July could be the start of the return to normal price gains. The blazing fast price increases we’ve seen in recent months could not last, especially with rising mortgage rates, expanding inventory, and declining investor interest.”

Movoto

David Cross, Chief Writer

“Going forward, we expect prices to continue to move laterally on a month-over-month basis. Higher mortgage rates and increased inventory will keep prices from increasing at the same pace we saw in the first half of the year.”

If you can remember back it was not a bad thing to have an interest rate in the 6-7% range. That was considered low. We’ll get used to the new normal soon enough but waiting may not be in your best interest financially for the next few years. Most people in the housing industry say prices will go up along with the interest rates increasing.

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