Market Intelligence Center – Michael Fowlkes
The state of the housing market has been improving over the last year, due in part to historically low interest rates. There is a lot of concern that the housing recovery could begin to weaken once interest rates move higher, but recent data shows that isn’t happening yet, despite a recent increase in rates. It is easy to understand why rising rates would lead to concerns, but I believe the recovery is going to continue, even as rates inch higher. The housing market is largely dependent on what buyers can afford to pay in terms of monthly payments. Rising interest rates mean a larger portion of monthly payments will go toward interest, which means the difference will have to come from the actual sale price of homes. The rate of increase in home prices is likely to slow as rates rise, but buyers and sellers should still be able to reach deals to get houses sold.
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