If Interest Rate Goes Up.....

[SmartMoney]

The current market has already factored an increase by the fed. That's why we are no longer at 3.625% and 0 points.

Mortgage rates have always reacted to the rumor ("buy on the rumor, sell on the news"). It's quite possible the rates could actually come done a hair if the fed announces a 1/4% hike.

[ApePeeD]

Originally Posted by Electrician4you

If that happens people will
have the 800 bucks additional per month to cover the higher cost
the house prices will have to come down to make up for the higher interest rate
Housing prices will stay high with fewer buyers that can afford the higher cost
Have to get some huge raises to bring up affordability.

No way the FED will let rates go 30-49% higher overnight. Too much of a shock. It would throw the market off a cliff

x2. My Economics of Money & Banking professor back at Tulane would constantly preach about not touching interest rates because of the shock it does to the economy -- even tiny adjustments to the interest rate.
He was constantly advocating other ways to adjust the economy, like adjusting the monetary supply. 30%-49% interest rate adjustment is absolutely radical -- look at adjustments over the history of the Fed and you'll see that such an adjustment would be dramatic.

[ashpelham]

Originally Posted by luv4horses

A quick calcualtion shows that the 0.25% difference in rate is worth $5200 in interest per $100,000 loan when spread out over 30 yrs.

Bottom line IMHO is that it will not make a lot of difference to affordability in the long run.

True true. But news media will convince the sheeple that this interest rate hike makes it less attractive to buy and they should keep renting.