Will Home Prices Fall as Mortgage Rates Rise?

Will Home Prices Fall as Mortgage Rates Rise? | Simplifying The Market

Mortgage interest rates have increased by more than half of a point since the beginning of the year. They are projected to increase by an additional half of a point by year’s end. Because of this increase in rates, some are guessing that home prices will depreciate.

However, some prominent experts in the housing industry doubt that home values will be negatively impacted by the rise in rates.

Mark Fleming, First American’s Chief Economist:

“Understanding the resiliency of the housing market in a rising mortgage rate environment puts the likely rise in mortgage rates into perspective – they are unlikely to materially impact the housing market…

The driving force behind the increase are healthy economic conditions…The healthy economy encourages more homeownership demand and spurs household income growth, which increases consumer house-buying power. Mortgage rates are on the rise because of a stronger economy and our housing market is well positioned to adapt.”

Terry Loebs, Founder of Pulsenomics:

“Constrained home supply, persistent demand, very low unemployment, and steady economic growth have given a jolt to the near-term outlook for U.S. home prices. These conditions are overshadowing concerns that mortgage rate increases expected this year might quash the appetite of prospective home buyers.”

Laurie Goodman, Codirector of the Housing Finance Policy Center at the Urban Institute:

“Higher interest rates are generally positive for home prices, despite decreasing affordability…There were only three periods of prolonged higher rates in 1994, 2000, and the ‘taper tantrum’ in 2013. In each period, home price appreciation was robust.”

Industry reports are also calling for substantial home price appreciation this year. Here are three examples:

Bottom Line

As Freddie Mac reported earlier this year in their Insights Report, “Nowhere to go but up? How increasing mortgage rates could affect housing,”

“As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

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Will Home Prices Fall as Mortgage Rates Rise?

Will Home Prices Fall as Mortgage Rates Rise? | Simplifying The Market

Mortgage interest rates have increased by more than half of a point since the beginning of the year. They are projected to increase by an additional half of a point by year’s end. Because of this increase in rates, some are guessing that home prices will depreciate.

However, some prominent experts in the housing industry doubt that home values will be negatively impacted by the rise in rates.

Mark Fleming, First American’s Chief Economist:

“Understanding the resiliency of the housing market in a rising mortgage rate environment puts the likely rise in mortgage rates into perspective – they are unlikely to materially impact the housing market…

The driving force behind the increase are healthy economic conditions…The healthy economy encourages more homeownership demand and spurs household income growth, which increases consumer house-buying power. Mortgage rates are on the rise because of a stronger economy and our housing market is well positioned to adapt.”

Terry Loebs, Founder of Pulsenomics:

“Constrained home supply, persistent demand, very low unemployment, and steady economic growth have given a jolt to the near-term outlook for U.S. home prices. These conditions are overshadowing concerns that mortgage rate increases expected this year might quash the appetite of prospective home buyers.”

Laurie Goodman, Codirector of the Housing Finance Policy Center at the Urban Institute:

“Higher interest rates are generally positive for home prices, despite decreasing affordability…There were only three periods of prolonged higher rates in 1994, 2000, and the ‘taper tantrum’ in 2013. In each period, home price appreciation was robust.”

Industry reports are also calling for substantial home price appreciation this year. Here are three examples:

Bottom Line

As Freddie Mac reported earlier this year in their Insights Report, “Nowhere to go but up? How increasing mortgage rates could affect housing,”

“As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

from Simplifying the Market™ https://ift.tt/2JgU98h
via IFTTT

Will Home Prices Fall as Mortgage Rates Rise?

Will Home Prices Fall as Mortgage Rates Rise? | Simplifying The Market

Mortgage interest rates have increased by more than half of a point since the beginning of the year. They are projected to increase by an additional half of a point by year’s end. Because of this increase in rates, some are guessing that home prices will depreciate.

However, some prominent experts in the housing industry doubt that home values will be negatively impacted by the rise in rates.

Mark Fleming, First American’s Chief Economist:

“Understanding the resiliency of the housing market in a rising mortgage rate environment puts the likely rise in mortgage rates into perspective – they are unlikely to materially impact the housing market…

The driving force behind the increase are healthy economic conditions…The healthy economy encourages more homeownership demand and spurs household income growth, which increases consumer house-buying power. Mortgage rates are on the rise because of a stronger economy and our housing market is well positioned to adapt.”

Terry Loebs, Founder of Pulsenomics:

“Constrained home supply, persistent demand, very low unemployment, and steady economic growth have given a jolt to the near-term outlook for U.S. home prices. These conditions are overshadowing concerns that mortgage rate increases expected this year might quash the appetite of prospective home buyers.”

Laurie Goodman, Codirector of the Housing Finance Policy Center at the Urban Institute:

“Higher interest rates are generally positive for home prices, despite decreasing affordability…There were only three periods of prolonged higher rates in 1994, 2000, and the ‘taper tantrum’ in 2013. In each period, home price appreciation was robust.”

Industry reports are also calling for substantial home price appreciation this year. Here are three examples:

Bottom Line

As Freddie Mac reported earlier this year in their Insights Report, “Nowhere to go but up? How increasing mortgage rates could affect housing,”

“As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

from Simplifying the Market™ https://ift.tt/2JgU98h
via IFTTT

Will Home Prices Fall as Mortgage Rates Rise?

Will Home Prices Fall as Mortgage Rates Rise? | Simplifying The Market

Mortgage interest rates have increased by more than half of a point since the beginning of the year. They are projected to increase by an additional half of a point by year’s end. Because of this increase in rates, some are guessing that home prices will depreciate.

However, some prominent experts in the housing industry doubt that home values will be negatively impacted by the rise in rates.

Mark Fleming, First American’s Chief Economist:

“Understanding the resiliency of the housing market in a rising mortgage rate environment puts the likely rise in mortgage rates into perspective – they are unlikely to materially impact the housing market…

The driving force behind the increase are healthy economic conditions…The healthy economy encourages more homeownership demand and spurs household income growth, which increases consumer house-buying power. Mortgage rates are on the rise because of a stronger economy and our housing market is well positioned to adapt.”

Terry Loebs, Founder of Pulsenomics:

“Constrained home supply, persistent demand, very low unemployment, and steady economic growth have given a jolt to the near-term outlook for U.S. home prices. These conditions are overshadowing concerns that mortgage rate increases expected this year might quash the appetite of prospective home buyers.”

Laurie Goodman, Codirector of the Housing Finance Policy Center at the Urban Institute:

“Higher interest rates are generally positive for home prices, despite decreasing affordability…There were only three periods of prolonged higher rates in 1994, 2000, and the ‘taper tantrum’ in 2013. In each period, home price appreciation was robust.”

Industry reports are also calling for substantial home price appreciation this year. Here are three examples:

Bottom Line

As Freddie Mac reported earlier this year in their Insights Report, “Nowhere to go but up? How increasing mortgage rates could affect housing,”

“As mortgage rates increase, the demand for home purchases will likely remain strong relative to the constrained supply and continue to put upward pressure on home prices.”

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via IFTTT

What Are the Experts Saying about Mortgage Rates?

What Are the Experts Saying about Mortgage Rates? | Simplifying The Market

Mortgage interest rates have risen over the last few months and projections are that they will continue their upswing throughout 2017. What impact will this have on the housing market? Here is what the experts are saying:

Laurie Goodman, Co-director of the Urban Institute’s Housing Finance Policy Center:

“In 1984, 1994, 2000, and 2013, every time we have rate increases, we have increases in nominal home prices. We expect this to be more pronounced, as there is a big demand-and-supply gap at the present time.”

Scott Anderson, Chief Economist for Bank of the West:

“The tightening labor market, rising wage growth, high levels of consumer confidence and a millennial generation with a pent-up demand for housing should allow the housing market to weather the storm of gradually rising interest rates.”

Ivy Zelman in her latest “Z” Report:

“Although we strongly believe that the housing supply-demand imbalance for single-family homes will continue to drive above-average home price appreciation, just as falling mortgage rates aided pricing power on the margin in recent months, we expect the opposite effect to become evident in the coming months. As such, we project year-end home price inflation of 4.8% for 2017 and 4.1% for 2018.”

Bob Walters, President & COO of retail mortgage lender Quicken Loans:

“A modest increase in mortgage rates won’t have much of an effect on home purchases. A buyer may need to slightly re-evaluate which homes they can afford, but it’s not likely to make an impact on qualifying, in most cases.”

First American Chief Economist Mark Fleming:

“Our survey data shows that mortgage rates would have to be significantly higher to have any meaningful impact. The house buying power that borrowers have, even with rates below five percent, still remains historically strong.”

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