Increases in mortgage rates shrinking house hunters’ buying power

Increases in mortgage rates shrinking house hunters’ buying power

Increases in mortgage rates shrinking house hunters’ buying power
With mortgage rates seeing small upticks over the last few weeks, how much home buyers can afford to spend on a home has gotten slightly smaller. The potential for borrowing costs to go higher has home buyers getting more aggressive in their house hunt.

According to a Redfin survey, nearly half of people who plan on buying a home would feel a greater sense of urgency to make a purchase if rates were to climb. Ordinarily, increases in home loan rates would put a damper on the volume of home sales but data shows that not happening at all.

“If rates were to rise much further in a typical market, we would expect there to be a turning point: Buyers would go from feeling more urgency to buy to feeling less urgency,” said Redfin’s chief economist Daryl Fairweather. “But this isn’t a typical market.”

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 3.875 percent and 15-year rates are near 3.125 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.