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This increase is negligible for the people buying these homes right now. So I don't believe that would be a reason right now for the market to stall.
I also believe that if a person has a hard time right now with the interest rate going up to just 4% then they probably would have a hard time even submitting an offer that would be accepted by the Seller in this market. They just aren't going to have the funds needed for an attractive DD Fee, bid over asking and the cash on hand should the house not appraise for the contracted price.
I think if people with limited funds really want to own a home right now then they are really going to have to think about moving a lot further out. In order for us to buy our last home in the SF Bay area (we wanted new, at least 3000sf and not in the millions) we had to buy 60+ miles from our jobs. Anyone that knows silicon valley traffic knows that this 60+ miles is not an hour or so drive. But for us, at that point and time in our life, the trade off was worth it.
Folks looking at mid-level and higher pricing for houses can always decide to buy down when rates go up, creating more demand for lower prices.
People looking at that $260,000 listing in Raleigh because it is what they can afford are always the first to be pushed completely out of the purchase market.
This increase is negligible for the people buying these homes right now. So I don't believe that would be a reason right now for the market to stall.
I also believe that if a person has a hard time right now with the interest rate going up to just 4% then they probably would have a hard time even submitting an offer that would be accepted by the Seller in this market. They just aren't going to have the funds needed for an attractive DD Fee, bid over asking and the cash on hand should the house not appraise for the contracted price.
I think if people with limited funds really want to own a home right now then they are really going to have to think about moving a lot further out. In order for us to buy our last home in the SF Bay area (we wanted new, at least 3000sf and not in the millions) we had to buy 60+ miles from our jobs. Anyone that knows silicon valley traffic knows that this 60+ miles is not an hour or so drive. But for us, at that point and time in our life, the trade off was worth it.
Yes.
The buyers that would be theoretically "priced out" by a 1-point increase in interest rates....are (unfortunately) already "priced out" of this market for all intents and purposes.
As Mike said; those folks are the ones stampeding to the ever-dwindling amount of listings with similar specs to that of the one in the viral video. The house can only go to one buyer; and chances are it will be someone with the means to present an offer strong enough to beat out the dozens of others....which would not be greatly affected by interest rates ticking up above 4%.
The buyers that would be theoretically "priced out" by a 1-point increase in interest rates....are (unfortunately) already "priced out" of this market for all intents and purposes.
Absolutely. This market is just crazy. I look at what houses in my neighborhood are selling for and there's no way I'd pay that much. Good for me since my home value went up but accordingly so has my property tax bill. NC needs to have Homestead Exemption like Florida or people will soon be taxed out of their own homes.
Absolutely. This market is just crazy. I look at what houses in my neighborhood are selling for and there's no way I'd pay that much. Good for me since my home value went up but accordingly so has my property tax bill. NC needs to have Homestead Exemption like Florida or people will soon be taxed out of their own homes.
I'm not sure I support a blanket homestead exemption unless it were only applicable to the 50% of homeowners below the median value or something like that. As a taxpayer, I'm not interested in subsidizing housing for people who don't need subsidization.
Interest mortgage rates today are 4/24%! My head is spinning. This will of course mean more families can not afford to buy homes in this market. I am wondering if this will cause the market to stall a little, or cause prices not to rise as fast as they have with multiple bids?
Thoughts?
you've been making offers against what, 5-10 other folks?
How many of those folks were at their price limit at 3%?
How many of those homes that you've made offers were cash or financed above 80% (your Realtor can tell you)?
From what I recall, you are not buying in a "first time buyers" range. The vast majority of folks I see in the "move up market" have not been maxing their spend, thus they can absorb a higher payment for the same house.
4% is a huge deal when prices double. You may be able to afford 4% on a $250,000 loan but can you afford 4% when homes double and the same house needs a $500,000 loan? We are getting hit on both ends. It is not just prices soaring. It is not just rates soaring. It is both going up at once. Worse still, everything not home related is going up with inflation, so you have less to begin with.
Rates going from 3% to 4% can be a deal breaker.
so prices "doubling"* without a rate increase was OK?
*prices in general were up 25.5% last year - all types, all ages, all of the Triangle. The rate of increase was primarily Jan-Aug, and it slowed towards the end of the year.
You should always see deposit rates at least 3% below loan rates.
It wasn't too long ago that savings rates were at 5% for internet banks. I'm trying to to remember what loan rates were, but I don't feel like they were 8%+. I could be wrong.
The buyers that would be theoretically "priced out" by a 1-point increase in interest rates....are (unfortunately) already "priced out" of this market for all intents and purposes.
As Mike said; those folks are the ones stampeding to the ever-dwindling amount of listings with similar specs to that of the one in the viral video. The house can only go to one buyer; and chances are it will be someone with the means to present an offer strong enough to beat out the dozens of others....which would not be greatly affected by interest rates ticking up above 4%.
in the way old days, there was a saying "drive until you qualify". Plenty of people moved to new subdivisions down I40 in JoCo from Exit 312 on in the early 2000's. Today, that's Zebulon.
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