Jul 11 2018 5018 1

Dated: 07/11/2018

Views: 12

Rising Interest Rates Have Not Dampened Demand

Rising Interest Rates Have Not Dampened Demand | MyKCM

Since the beginning of the year, mortgage interest rates have risen over a half of a percentage point (from 3.95% to 4.52%), according to Freddie Mac. Even a small rise in interest rates can greatly impact a buyer’s monthly mortgage payment.

First American recently released the results of their quarterly Real Estate Sentiment Index (RESI), in which they surveyed title and real estate agents across the country about the impact of rising rates on first-time homebuyers.

Real estate professionals around the country have not noticed a slowdown in demand for housing among young buyers; nearly 93% of all first-time homebuyers last quarter were between the ages of 21-35, with the largest share of buyers (51%) coming from those ages 26-30.

First American’s Chief Economist Mark Fleming had this to say,

“On a national level, mortgage rates would need to hit 5.6%,1 percentage point above the current rate, before first-time homebuyers withdraw from the market.”

So, what is slowing down sales?

According to the last Existing Home Sales Report from the National Association of Realtors, sales are now down 3.0% year-over-year and have fallen for the last three months. If rising interest rates aren’t to blame, then what is?

Fleming addressed the cause, saying that:

“The housing market is facing its greatest supply shortage in 60 years of record keeping, according to the Federal Reserve Bank of Kansas City. The ongoing housing supply shortage will make it difficult for first-time buyers to find a home to buy, even when they are financially ready.”

Bottom Line

First-time homebuyers know the importance of owning their own homes and a spike in interest rates is not going to keep them from buying this year! Their biggest challenge is finding a home to buy!

Blog author image

Jeri Patrick

In today’s complex and difficult real estate market you need a professionals who will do whatever it takes to market and sell your home. Jeri Patrick has a team with an established history of succes....

Want to Advertise on this Site?

Latest Blog Posts

Jul 18 2018 5018 1

Demand for Homes to Buy Continues to ClimbAcross the United States, there is a severe mismatch between the low number of houses for sale and the high demand for those houses! First-time homebuyers

Read More

Jul 17 2018 5018 1

4 REAL Reasons Why We Buy A Home!We often talk about why it makes financial sense to buy a home, but more often than not, the emotional reasons are the more powerful or compelling ones.No matter

Read More

Jul 16 2018 5018 1

First-Time Home Buyers Continue to Put Down Less Than 6%!According to the Realtors Confidence Index from the National Association of Realtors, 61% of first-time homebuyers purchased

Read More

Jul 13 2018 5018 1

Want to Sell Your House Faster? Don’t Forget to Stage! [INFOGRAPHIC]Some Highlights: The National Association of Realtors surveyed their members & released the findings of their 

Read More