Thursday, March 22, 2018 / by Vanessa Saunders
The Federal Reserve put lending rates up another tick today, 25 basis points, (a quarter of a percent), and mortgage rates, which are based on the Federal Reserve rates, will surely follow suit. So does that have you thinking that rising mortgage rates on Hudson Valley properties will cause a slowdown in purchases which would, in turn, lead to a fall in house values?
- The decision to buy a new home is typically linked to owner's decision to sell their current home.
- Once financing costs for a new mortgage rise above the rate borrowers are paying for their current mortgage, borrowers would have to give up below-market financing to sell their home.
- There is an associated drop in the supply of homes from the link between the selling and buying decisions.