Interest Rates Are On The Rise - Who more do you need to hear it from?

The Wall Street Journal has been saying it, the NY Times has been saying it, I’ve been saying it, and only a few consumers are hearing it.

Many self described ‘savvy’ buyers that are waiting for the spring market to get into full swing will be surprised to learn that their dream home just got much more expensive.

Just today interest rates in my local market crept to 5.375%, which is a 3/8% difference from two weeks ago. What does this mean? On a $400K mortgage for 30 years, that house just got $32,000 more expensive!

What will happen to those buyers that are on the fence? The cost of sitting will get costlier, and it that dream home will be much more difficult to afford. Some economists are predicting more than a 2% rise in interest rates. Personally, I think that’s a doomsday scenario for many markets which is unlikely. Not that anyone knows for sure, but rates over do 6% seem right around the corner.

What makes a sophisticated investor? One that recognizes trends just a bit sooner than everyone else that’s playing it safe. I just came back from a fabulous open house. This home is a steal in this area (no, it’s not my listing) and will go right away. I can think of two buyers specifically who would think this house is their dream home. Both will see it, both will fall in love with it, one will jump on it, and the other will wait.

One will call me in three months and tell me how happy they. The other will compare every home they see to the one that got away, and pay more when they do get off the fence.