National Public Radio is running an article on trepidation among homebuilders about the pending, expected interest rate hike from the Federal Reserve later this week.
By now, everyone seems to think the Fed will finally abandon the Zero Interest Rate Policy and allow rates to normalize.
Here's the economic impact from one real estate consultant firm, as noted in the NPR article:
Some economists, though, think people who want to buy a house should have a greater sense of urgency.
John Burns, who runs a national real estate consulting firm, says mortgage rates are expected to rise about 1 percentage point over the next several years. That would mean the same-priced house will cost you 12 percent more in monthly payments.
"So if mortgage rates go from 4 [percent] to 5 [percent], payments are going to go up 12 percent; that will hit affordability hard," he says. "And I don't think that message has really gotten out there to people — that they understand they should take advantage of where rates are today."
And Burns says it's once again become easier than many people think to qualify for a mortgage, despite caution on home loans by some of the biggest banks.