Interest Rates & Home Values
Historically low mortgage interest rates have been a major impetus to the housing recovery over the last several years. However, many industry experts are concerned about the possible effect of rising rates moving forward.
The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors all projecting mortgage interest rates will move upward in 2017. Increasing interest rates will impact buying power and may stifle demand.
In a recent study of industry experts, “rising mortgage interest rates, and their impact on mortgage affordability” was named by 56% as the force they think will have the most significant impact on U.S. housing in 2017. If rising rates slow demand for housing, home values will be impacted.
To this point, Pulsenomics, recently surveyed a panel of over 100 economists, investment strategists, and housing market analysts. The survey revealed the following:
Real Estate Bottom Line
Most experts feel interest rates would need to hit 5% or above to have an impact on home prices.