This week our listings saw an average of 1.5 showings each. With traffic still a bit slow for the season, we hope for quality not quantity.
Last week I blogged about the media’s optimism around a market recovery. Well, interest rates seem to have followed suit. This past week mortgage interest rates rose to the highest level in six months. It will be very interesting to see how this shift will affect the real estate market.
In general, buyers have begun to get off the fence and have started making offers. There is still an expectation that the price has to be great, but nonetheless, at least they are trying. That is quite an improvement from a few months ago when there was simply no activity.
Mortgage interest rate increases tend to react to wall street. So this recent rise points to an overall recovering market. But the question is how that will affect the housing market in the short term. A 1/2 point rise in interest rates equates to another $42/month for every $100,000 borrowed. This most certainly has an impact on affordability.
As the stock market slowly recovers, buyers will have more confidence in their ability to make monthly payments. But rising interest rates mean that they might have to look at less house.
While the rising rates could have a short term impact on prices, I for one would rather lock in the lower long term interest rate. For those buyers out there looking to make a move, now would be a very good time to pull the trigger.