Your Palm Beach County Real Estate Market News by Lilianna Gizynski
Mortgage rates are now at their highest level in four years and poised to move even higher. The timing couldn’t be worse, as the usually busy spring housing market kicked into gear early this year amid higher home prices and strong competition for a record low supply of homes for sale.
Homes starting to be unaffordable.
The average rate on the popular 30-year fixed is now right around 4.50 percent, still low when looking historically, but buyers over the past six years have gotten more used to rates in the 3 percent range. A 5% rate would cause more than a quarter of today’s homebuyers to slow their plans. Many homebuyers will consider more affordable areas or just buy a smaller home. Unlike during the last housing bubble in the mid-2000s, mortgage lenders today are much more strict with regard to the borrower’s ability to repay the loan. They are required by new regulations in the industry to be that way. Higher mortgage rates may mean some borrowers on the margins will not qualify for the size of the loan they need or want.