With a spike in interest rate in Dec 2016 many of the home buyers are anxious what will and how will the interest rate impact the home buying decision.
Below is an infographic presentation of who will be impacted due to rising interest rates in the mortgage world.
Why the secondary homes buyers don't get impacted by rising interest rates?
The reason is they have been through the home buying roller coaster. Second time home buyers including buyers who are downsizing know that this will be the home that they will stay for years to come. They understand the financing commitment and advantage of owning a home. However, this group of the buyers is also home sellers that have the most anxiety about carrying two mortgages and/or becoming a landlord.
Will the real estate market in Northern Virginia slow down with rising interest rate?
Millennials and first time home buyers are still the biggest buyer pool in the Northern Virginia area. Some may be less qualified for the purchase price while others may not get impacted. The recent positive economic report on consumer confidence does indicate buyers are confident about the economy.
There are always buyers we come across that will sit on the fence and wait out for the market to react. As you might have read in my past blogs, real estate is a long-term investment. Whether you pay a rent or own a home you will have to pay for shelter. Just like any other investment real estate will have its up and down.
Final Thoughts
To leave you will food of thought here is a cheat sheet of historic interest rate in past decade. If you think 4-4.5% is too the high-interest rate you may want to calculate your payments with some high-interest rate we have seen just over the past decade.
And this is one of the reasons why we think the Millennials are confident about their home buying decision despite students loans and other lifestyle expense they may have.
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