Rock-bottom inventory is fueling a run-up in home prices as interest rates rise and ratchet up pressure on buyers to act. Should you be desperate? Will prices continue to surge to new heights?
In this installment of Buying Advice, we’ll ask agents, a housing analyst and an economist what to expect this year, and we’ll also check in with the latest housing statistics.
Buyers are beginning to feel the pressure now that interest rates are once again climbing. The average rate on a 30-year-fixed mortgage rose from a monthly average of 3.68% in the first week of January to an average of 4.68% in the week ending June 28, according to mortgage-data website HSH. Rates took their biggest weekly jump since 1987 in the last week of June, according to Freddie Mac.
“Every tenth of a point that rates go up makes buying more expensive,” says Jed Kolko, Trulia’s chief economist. “It will almost certainly be more expensive to buy six months, a year or even two years from now.”
A rise in rates from 4.5% to 5% adds $75 to the monthly payment on a $300,000 house with $50,000 down.