Mortgage rates are currently on the rise, but, according to First American’s Potential Home Sales Model, the rise in rates will not noticeably reduce home sales. Even if the rates went to 5 percent, which is expected to occur in the next year, home sales would barley be affected.
First American’s sales model shows that, if fixed rate 30 year mortgage rates went up to 5 percent (currently hovering around 4.5), home sales would only slightly decrease from 6.11 million to 6.1 million.
According to First American’s economist Mark Fleming, the reason why rising mortgage rates won’t significantly affect home sales is because household income, partially due to the healthy rise of mortgage rates, is also on the rise. Also, homebuyers can easily adjust to higher fixed rate mortgages by taking an adjustable rate mortgage instead.
The housing market is greatly flexible and can adjust well to small rises in mortgage rates. Flemings believes that the rising mortgage rates should not be a worry for buyers; instead, they should worry about finding the right home in today’s low-inventory time period.
Author:Kurt Galitski DRE 01348644 Phone: 714-957-6677 Dated: June 28th 2018 Views: 235 About Kurt: After 15 years of founding and running a successful boutique real estate office in Costa Mesa as a l...
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After 15 years of founding and running a successful boutique real estate office in Costa Mesa as a licensed broker, Kurt's passion has always been in real estate sales and it shows. Kurt and his group did 140 plus transactions while managing a successful office. His sales and marketing expertise offers sellers the ultimate in advertising exposure and proven marketing strategies to sell your property… fast. For Kurt and his group, the aim is clear—to help you achieve your slice of “the good life”.
Specializing in residential sales and investments, Kurt has been featured in Orange Coast Magazine for five consecutive years as a Five Star Agent. Client satisfaction is very important to him. Competitive in business and sports, Kurt works hard and plays harder. He enjoys a competitive round of golf, cycling, and a day on the slopes with his family. He’s the former Chairman of Parks and Recreation for the city of Costa Mesa and former board member of Costa Mesa United. Today, he enjoys volunteering his time with the Costa Mesa and Estancia High School Foundations.