Even though the winter scene looks quite cool, the market is still moving along very well and warming up already for 2017. If you are transitioning to the Geneva Lake Area it is never too early to start looking for your next home.
Whether the City of Lake Geneva, the Village of Williams Bay or Fontana, the lake is always open to explore. Winter activities abound with skiing, skating, hiking, snow shoeing. Spend some time investigating.
An easy way to start is to send me an email and establish a private search tailored to your specific living style. Easy and delivered with your morning coffee! Just add to your Christmas shopping list.
This increase in interest rates remains a concern for economist who say that the incentive to buy a home decreased slightly. While it may not be enough to ward off first-time homebuyer, the rising rates combined with the rising home prices could discourage homeowners from upgrading to a larger or better home, therefore leaving little inventory for first-time buyers to move into.
The level of the impact of the rate hike and rising interest rates is yet to be seen, and remains the big unknown, Steve Rick, CUNA Mutual Group chief economist, said in an interview with HousingWire.
“Higher interest rates will choke off a little bit of demand but more jobs, more income, more wages should stimulate housing demand,” Rick said. “So the big question is, which is going to have a bigger impact?”
There is no real way to know just how much the rate hike will deter first-time home buyers, or if the construction industry will step up and build new homes for these buyers. Perhaps only time will tell.
Overall, however, many economists stress that the increase is not enough to create a significant impact on housing demand, and remain positive about 2017’s housing market.
“The era of ultra-low interest rates is over,” said Lawrence Yun, National Association of Realtors chief economist. “Today’s short-term rate hike will be followed by several additional rounds of increases in 2017 and 2018.”
“Despite these moves, mortgage rates will not rise alarmingly,” Yun said. “By this time next year, expect the 30-year fixed rate to likely be in the 4.5% to 5% range.”
One expert explained that while interest rates are increasing, they are still very low historically.
“While those looking to buy a home are understandably concerned about the path of rates ahead, it’s important to remember that borrowing costs remain exceptionally low by historical standards,” said Erin Lantz, Zillow Group vice president of mortgage “Rising rates may impact the location or size of the home they hope to purchase, but buyers that are fully committed to buying a home are unlikely to be swayed by the FOMC’s decision to raise rates.”
Of course, the rise of interest rates is not necessarily negative for everyone, one expert pointed out.
“On the whole, the impact of a quarter point rate hike on U.S. households should be minimal,” said Curt Long, National Association of Federal Credit Unions chief economist. “But for the millions of savers living on fixed incomes it surely comes as a relief, especially if it is accompanied by a forecast for more in 2017.”
“To that end, the committee’s economic projections may hold more interest than the statement itself,” Long said. “For typical Main Street Americans, the move serves as a reminder to review the rates on their savings and borrowings and to shop around. They may find that even in a low-rate environment there are institutions willing to provide superior rates and higher-quality service than the big Wall Street banks.”
Housing Wire Update-morning edition. December 15, 2016.