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Some believe that the rising mortgage rates may spell a real problem for the continuance of a housing recovery. That may be. However, based on the results of the recent Berkshire Hathaway HomeServices’ Homeowners Sentiment Survey (the BtripleHdoubleS), many are still optimistic about the state of the housing market.
Ironically, the most optimistic group are the Millennials. About 74% have a favorable view of housing, up 15% from just a year ago. Of Gen-Xers, those between the ages of 35 and 60, 67% view the market favorably, up 8% over last year. Overall, 66% of current homeowners, and about 63% of those thinking of buying, view the housing market as good. That’s a whole lotta people with a favorable view of the housing market.
According to Gino Blefari, Berkshire’s CEO, the rate hikes may grab the headlines, but the increase is the mark of an improving, healthy economy. That is good for housing and housing finance.
Reports are that applications are down. But, they normally decline this time of year. That’s nothing new.
However, applications for loans on new home sales in November were up about 12% over last year. That shows continued strength in the economy.
Increasing interest rates will definitely hinder refinances but may not have such a devastating effect on home sales. 2017 will spark the return of the purchase market with Millennials leading the way.
Don’t let rising rates get you down. Prepare now for the new normal in 2017; a purchase market, and the opportunities it will provide for home financing.
If you do, it can definitely be a Happy New Year.
