What Will Happen When Mortgage Rates Rise?
As you view the chart below, you will note the recent sharp spike in interest rates for the 30 year conventional mortgage. What you may not notice at first glance, is the fact that the recent jump in rate is the highest on a percentage basis over the past 30 years!
As a real estate professional for the past 15 years, I make it my business to study mortgage interest rates and their relationship to home sales. During the recent spike shown below, home sales sputtered for a short time. It made me wonder what would happen if interest rates continued on an upward basis. Would they sputter or would there be panic buying with those sitting on the fence fearing missing out on the lower rates. Time will tell!