Rising mortgage interest rates may affect home sales in expensive regions, but experts do not anticipate that they will have much of an impact on high value home sales. The increase is due to the tapering off of the Federal Reserve stimulus plan, which was the driving force behind such low rates. While the uptick is will likely slow the rate of home sales, it is not expected to reflect a decrease in mortgage records.
"I anticipate that the rate [for a 30-year fixed mortgage] will probably go up to 5 percent by the end of next year," Lawrence Yun, chief economist for the National Association of Realtors told Forbes. "So from now until next year, the general direction will be upward."
Yun noted that the rate of home sales in affordable regions isn't likely to experience a drastic impact, as the rise of interest rates will have less of an effect on mortgages in the areas, but more higher priced homes might feel the difference more.
However, experts remain optimistic about the recovery of the housing market overall. John Canally told the news source that the he suspected the higher rates might be a positive thing, cooling off some of the "frothiness" in housing.
The average 30-year fixed-rate mortgage for the week ending June 6 was 3.91 percent, up 0.1 percent from the previous week, according to Freddie Mac.