Mortgage rates ended last week at a 4 year high, and are poised to move even higher. The timing could not be worse, as the usually busy spring housing market kicked into gear early this year amid higher home prices and strong competition for a record low supply of homes for sale.
The average rate on the popular 30-year fixed is now right around 4.5% , still low when looking historically, but buyers over the past six years become accustomed to rates in the sub 4% range. Mortgage rates last hit 5% back in 2011.
A 5% rate would cause more than a quarter of today’s home buyers to slow their plans, according to a Redfin survey of 4,000 consumers at the end of last year. Just 6% said they would drop their plans to buy altogether. About one-fifth of consumers said 5% rates would cause them to move with more urgency to purchase a home, fearing rates would rise even further. Another fifth said they would consider more affordable areas or just buy a smaller home.
Unlike during the last housing bubble in the mid 2000s, mortgage lenders today are required by new regulations to examine potential borrowers with greater scrutiny. Higher mortgage rates may mean some borrowers on the margins will not qualify for the size of the loan they need or want.
Wallingford PA Real Estate – Wallingford, PA 19086