Rising Mortgage Rates Fail to Dampen the Buyer's Market

2016 was a stellar year for buyers, witnessing mortgage rates below 3.75 percent all summer on the average 30-year fixed-rate mortgage. With the steadily rising interest rates of today's real estate financing trends, currently at around 4.5 percent and climbing for the typical FHA loan, you'd think there would be some sort of sales slowdown – but that couldn't be further from the case.

Flying High

Home sales are moving on up – flying in the face of rising interest rates. This may slow increases in housing prices, but it's still expected to remain a seller's market across most of the United States for 2017. And because interest rates still remain historically low overall (despite multiple raises by the fed), 2017 remains a great time to purchase a home – and buyers are scrambling to take advantage.

Heating Up

Having more potential buyers than sellers means it will continue to be a seller's market across the country. Nationally, inventory was less than 4.5 months toward the end of last year, with the country experiencing a shortage that it hasn't seen in 20 years. At present, in the hottest markets such as Denver, well priced homes are receiving multiple offers – and selling fast.

No End in Sight

New home building may later offer some minor relief, but that remains to be seen. Especially hard hit continues to be the lower-priced homes, first-time buyer segments, as well as retirees. Because so many owners owe much more on their homes than they're worth, inventory remains in back-stock. Some homes that did make it to the market experienced financing issues as the appraisals came in well below sales prices.

To view the original article, visit the Properties Online blog.