Are low interest rates setting up the real estate market for a future slow down of sales? What will happen when rates are in the 5% range after the appreciation of real estate prices over the last few years? Are we pricing out the "move up buyer"? The borrowers that have ratess in the 3's are going to have a hard time parting with that low mortgage rate.
I have a client now with a 3.25% rate on their mortgage rate and, because the bought two years ago, now have equity in their property. They would like to cash out some of that equity (sound familiar...) and do some home improvements. Because the have a credit score that isnt over 740, the cost for the cash out and lower credit score puts them in the 4.5% range. They now have to give some thought as to whether parting with that low rate makes any sense for them.
I suspect we are going to be having this same conversation with buyers over the next few years!
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