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The Mortgage Bankers Association, the National Association of Realtors, Fannie Mae and Freddie Mac are each projecting mortgage interest rates to increase substantially over the next twelve months. What will that mean to the housing market in 2015? Last week, we posted a graph showing that home prices appreciated each of the last four times mortgage interest rates dramatically increased. Today, we want to talk about the impact higher rates might have on the number of home sales. The reason many experts are calling for a rise in rates is because they see a stabilizing economy. With the economy beginning to improve, they expect the employment situation to regain some ground lost during the recession, incomes to grow and for consumer confidence to improve.
What will that mean to home sales next year?
In its November 2014 U.S. Economic & Housing Market Outlook, Freddie Mac explains:
“While higher interest rates generally detract from housing activity, when they occur with strong job and income growth the net result can be increases in household formations, construction, and home sales. Our view for 2015 is exactly that, namely, income and job growth offset the negative effect of higher interest rates and translate into gains for the nation’s housing market.”
Bottom Line
Even with mortgage rates increasing, home sales and home appreciation should be just fine in 2015.
Winter is a great time to buy! If you are looking to purchase a home, give us a call, text or email. Let us help you find a great home while there is less home-buying competition.
-Steve and Sandra
Steve Hill and Sandra Brenner
SEATTLE-NORTHWEST
Windermere Real Estate
206-769-9577
stevehill@windermere.com
BrennerHill.com
SeattleFreeHomeInfo.com
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