Since the beginning of last year, the U.S. housing market has been displaying an incredible rebound from the recession, anchoring the improvement of the overall economy. But some economists are wondering if the market is growing too quickly, a fear that has been compounded by new data showing that mortgage rates for U.S. homes jumped a full percentage point in only the last two months, reaching its highest level in two years.
According to the Wall Street Journal (WSJ), between May and July of this year, rates for a typical 30-year fixed-rate mortgage increased from 3.59 percent to 4.68 percent. These statistics, provided by the Mortgage Bankers Association, represent a potential stumbling block for would-be home buyers, as higher mortgages may push properties out of many Americans' price range. The WSJ report includes an example of a hypothetical $200,000 home with a 10 percent down payment, extrapolating from this example that a monthly mortgage payment would go up by $100.
"That's extremely meaningful," Ronald Peltier, a HomeServices of America Inc. chief executive, told the source. "It is putting people on the sidelines that were really at the margins of being able to qualify."
Some analysts see a bright side to the higher rates, though, speculating that greater mortgage payments may actually spur potential buyers into making purchases now in order to avoid future rate hikes. Additionally, the recent increase is hardly considered disastrous, and could even stand to go as high as 6 percent before hitting the limits of unaffordable housing.
If you're in the market for a new home, whether a beach house for the summer or something to last year round, consider the unique properties of Rehoboth Beach. Speak to a Rehoboth Beach realtor today about the many incredible and still affordable properties available now.