Mortgage rates would have to be higher than 6% to discourage prospective fall and even winter home-buyers from

FiveStar-GloriaMatlin-2buying a home. While the jury is still out on what the Federal Reserve is going to do about the Fed Funds rate increase, there is certainty that it will happen at some point in the near future. The lack of consensus stems from mixed signals coming from various components of the economy and the financial situation abroad. The good new is:

How Higher Mortgage Interest Rates Will Impact the Housing Market?

When the Feds decide to raise rates, any increase will be nominal and gradual. The anticipation is that the initial increase will be only 25 basis points (e.g., from 3.75% to 4.00%). This is still about 50 basis points lower than the high reached in the summer of 2013 when the Federal Reserve first announced that it would start fading out of its easy monetary policy.

Nonetheless, Americans are well aware of the anticipated mortgage rate increase that’s coming up: 42% of Americans think mortgage interest rates will increase over the next six months, while 20% believe the rates will stay the same. A third (32%) of Americans, and almost 4 in 10 (38%) Millennials, are still unsure about what will happen to the mortgage rates, with Millennials are not as likely as other generation to think that rates will increase at all over the next 6 months.

Falling houses with percent symbol on sky background

How Do Americans Feel About Rising Mortgage Rates?

Interestingly, for Americans who are looking to purchase a home this year, mortgage rates are not the primary concern. Among Americans who would ever buy a home, most worried about being able to get a mortgage and if they could find a home that they would like. Raising mortgage rate is only the third concern, followed by fears that home prices would increase before they buy a home. But, for millennials aged 18-34 years old, simply being able to get a mortgage is the biggest and marginally larger concern than for all Americans in general. Millennials also worry more about finding a home they like and home prices rising before they worry about raising mortgage rates.

Long story short, an increase in rates would not turn people off from buying a home, but it may slightly lower the price range in which they are looking to buy. Also, the impact is quite dependent on the price range in which the prospective buyer is looking to buy. – See more mortgage rate details HERE

2015-November: For a second year, Gloria Matlin has earned the esteemed Five Star Real Estate award for 2015. This honor is one of many that confirms her standing as Chicago North Shore’s  client driven, top performing, highly trusted real estate professional.  On The Go?…Move with Glo this autumn season.

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