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30 year mortgage interest rate has jumped from around 3.4% in early May to about 4.5% today. For most home buyers who have a fixed monthly budget, the rise in rate means they now have less buying power as more of their money must go towards interest payment.
So far I have not seen sellers cutting prices at all, most still say it's a hot market. "My neighbor just sold his house for $$$" is a line I hear a lot of.
As someone looking to buy, I want to hear how other buyers are doing/reacting to the mortgage issue(if anything). Thanks.
well, i'm a buyer of a pending short sale and the nice stable rates of 3.15 when i start the process and the new rates of 4+ have quite an impact. we can afford the new rates but the mental mindF that if we were to close today are now paying 2-300 more than we would have for the same purchase price is very annoying. i'm hoping rates go back down a bit before we actually see a close date in sight but if this continues we may reevalute the home or put more % down. if rates keep going up at the pace they have been in the last few weeks we will be back at 6-7% before summers over.
well, i'm a buyer of a pending short sale and the nice stable rates of 3.15 when i start the process and the new rates of 4+ have quite an impact. we can afford the new rates but the mental mindF that if we were to close today are now paying 2-300 more than we would have for the same purchase price is very annoying. i'm hoping rates go back down a bit before we actually see a close date in sight but if this continues we may reevalute the home or put more % down. if rates keep going up at the pace they have been in the last few weeks we will be back at 6-7% before summers over.
I hear ya. It's more than just a MindF, the extra $200-300 a month you're paying will add up to a lot of money over the life of the loan. My guess is that sales volume will drop in July/Aug., assuming rates stay where they are or go even higher. Sellers won't throw in the towel and cut prices until perhaps after labor day. I'll still be looking, but suddenly not in a hurry anymore...
Lets not get carried away. When i bought my home 3 years ago I thought my 5% was great. 4.5 is still low by historical standards.
I agree. I'll have to admit, when the rate went from 3.4% to 3.75% between the time we started casually looking towards the latter part of 2012 to when we locked in our rate for our recent home purchase, and I figured out the difference over the life of the loan, I kicked myself.
Lets not get carried away. When i bought my home 3 years ago I thought my 5% was great. 4.5 is still low by historical standards.
Fair point. But, interest rate moves inversely to asset prices. I'd imagine the house you purchased with that 5% rate is probably worth a bit more today.
By historical standard, today's rate is still very low, but home prices is still very high. Many places in Somerset county are asking/trading at all time highs. All I am saying is that as a buyer, as interest rate has moved up meaningfully from where it was, I expect prices to come in a little bit.
30 year mortgage interest rate has jumped from around 3.4% in early May to about 4.5% today. For most home buyers who have a fixed monthly budget, the rise in rate means they now have less buying power as more of their money must go towards interest payment.
So far I have not seen sellers cutting prices at all, most still say it's a hot market. "My neighbor just sold his house for $$$" is a line I hear a lot of.
As someone looking to buy, I want to hear how other buyers are doing/reacting to the mortgage issue(if anything). Thanks.
Rates haven't moved enought to slow down home sales. There are still too many buyers relative to the inventory available. Inventory remains at historic lows and in spite of the rise in mortage rates, those remain low as well. Low inventory coupled with still very low rates and high demand will result in continued aggressive bidding on homes. Something else will need to happen for the home prices to pull back.
Well, if you've been looking....get out this weekend and MAKE AN OFFER. Stop sitting on the fence
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