{"id":608,"date":"2016-12-15T08:39:16","date_gmt":"2016-12-15T14:39:16","guid":{"rendered":"http:\/\/margaretcanfield.com\/blog\/?p=608"},"modified":"2016-12-15T08:39:16","modified_gmt":"2016-12-15T14:39:16","slug":"should-you-be-alarmed-at-rising-interest-rates-not-really-as-rates-are-still-historically-low","status":"publish","type":"post","link":"http:\/\/margaretcanfield.com\/blog\/2016\/12\/should-you-be-alarmed-at-rising-interest-rates-not-really-as-rates-are-still-historically-low\/","title":{"rendered":"Should you be alarmed at rising interest rates? Not really as rates are still historically low."},"content":{"rendered":"

This increase in interest rates remains a concern for economist who say that the incentive to buy a home\u00a0decreased slightly<\/a>. 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.<\/p>\n

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,\u00a0CUNA Mutual Group<\/strong>\u00a0chief economist, said in an interview with\u00a0HousingWire<\/strong>.<\/a><\/p>\n

\"\"<\/p>\n

\u201cHigher interest rates will choke off a little bit of demand but more jobs, more income, more wages should stimulate housing demand,\u201d Rick said. \u201cSo the big question is, which is going to have a bigger impact?\u201d<\/p>\n

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.<\/p>\n

Overall, however, many economists stress that the increase is not enough to create a significant impact on housing demand, and remain positive about 2017\u2019s housing market.<\/p>\n

\u201cThe era of ultra-low interest rates is over,\u201d said Lawrence Yun,\u00a0National Association of Realtors<\/strong>\u00a0chief economist. \u201cToday\u2019s short-term rate hike will be followed by several additional rounds of increases in 2017 and 2018.\u201d<\/p>\n

\u201cDespite these moves, mortgage rates will not rise alarmingly,\u201d Yun said. \u201cBy this time next year, expect the 30-year fixed rate to likely be in the 4.5% to 5% range.\u201d<\/p>\n

One expert explained that while interest rates are increasing, they are still very low historically.<\/p>\n

\u201cWhile those looking to buy a home are understandably concerned about the path of rates ahead, it\u2019s important to remember that borrowing costs remain exceptionally low by historical standards,\u201d said Erin Lantz,\u00a0Zillow Group<\/strong>\u00a0vice president of mortgage \u201cRising 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\u2019s decision to raise rates.\u201d<\/p>\n

Of course, the rise of interest rates is not necessarily negative for everyone, one expert pointed out.<\/p>\n

\u201cOn the whole, the impact of a quarter point rate hike on U.S. households should be minimal,\u201d said Curt Long,\u00a0National Association of Federal Credit Unions<\/strong>\u00a0chief economist. \u201cBut 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.\u201d<\/p>\n

\u201cTo that end, the committee\u2019s economic projections may hold more interest than the statement itself,\u201d Long said. \u201cFor 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.\u201d<\/p>\n

 <\/p>\n

Housing Wire Update-morning edition. \u00a0December 15, 2016.<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

This increase in interest rates remains a concern for economist who say that the incentive to buy a home\u00a0decreased 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 […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[28,27,29,26,30],"class_list":{"0":"post-608","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-lake-geneva-real-estate","7":"tag-2017-housing","8":"tag-housing","9":"tag-housing-demand","10":"tag-interest-rates","11":"tag-rate-hike","12":"entry"},"aioseo_notices":[],"_links":{"self":[{"href":"http:\/\/margaretcanfield.com\/blog\/wp-json\/wp\/v2\/posts\/608","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/margaretcanfield.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/margaretcanfield.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/margaretcanfield.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/margaretcanfield.com\/blog\/wp-json\/wp\/v2\/comments?post=608"}],"version-history":[{"count":2,"href":"http:\/\/margaretcanfield.com\/blog\/wp-json\/wp\/v2\/posts\/608\/revisions"}],"predecessor-version":[{"id":610,"href":"http:\/\/margaretcanfield.com\/blog\/wp-json\/wp\/v2\/posts\/608\/revisions\/610"}],"wp:attachment":[{"href":"http:\/\/margaretcanfield.com\/blog\/wp-json\/wp\/v2\/media?parent=608"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/margaretcanfield.com\/blog\/wp-json\/wp\/v2\/categories?post=608"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/margaretcanfield.com\/blog\/wp-json\/wp\/v2\/tags?post=608"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}