Rising Interest Rates A Challenge For Buyers

Dated: 02/16/2017

Views: 79

The double whammy of rising interest rates and increased home prices has created a precarious situation for many Americans searching for a new home. According to a recent analysis by Fitch Ratings, the average millennial homebuyer in the U.S. lost about 9 percent in mortgage capacity between early October and last month, all else being equal. The average interest rate on a 30-year fixed-rate mortgage has increased sharply in the past few months, peaking at a rate of 4.32 percent in late December, up from 3.54 percent in early November, according to Freddie Mac. While there have been some decline in the short term, rates have stayed above 4 percent so far this year, averaging 4.17 percent last week. A borrower whose maximum loan amount was the median $120,000 when rates were at 3.42 percent in early October would have watched that same loan fall to $109,000 at 4.2 percent interest, all else being equal, according to Fitch. This not only complicates the situation for the buyer, but ultimately will create issues for sellers as well as rates continue to rise.

What this means in layman's terms for most homebuyers is that the loan amount they can qualify for becomes lower, and/or the monthly amount they pay for a that loan will be higher. Simply put, if you are considering a home purchase in the near future, there is no better time than now. Shoot me an email or text or give me a call and we can discuss your particular situation.

Want to Advertise on this Site?

Latest Blog Posts

February And March Spring Lawn Care Guide

February Fight winter weeds with post-emergent herbicides and spot treatments. Green, active weeds are easy to spot in brown, dormant, warm-season lawns.1 Check lawns for debris, twigs

Read More

Mar 11 2018 30078 1

There were 182 active new construction homes on the market March.

Read More


The average home price of Lubbock homes sold in January was $181.

Read More

How To Improve The Market Value Of Your Home Part 1

The Kitchen is still king.  Buyers of all kinds have long focused on the kitchen, but it holds particular sway over first-time homeowners. A “modern/updated kitchen” tops the list

Read More