[WATCH] First American economist: People want mortgages now before rates increase

5% rate reduces purchasing power by about $20,000

Interest rates are likely to continue rising in the foreseeable future.

Further, predictions for when rates may begin to dip again range from late 2019 to all the way into 2020.

However, the near-term outlook for the mortgage market remains positive according to an CNBC interview with First American Chief Economist Mark Fleming.

“When the rates rose… the mortgage market had already priced that in because they were expecting it. We’re seeing demand effectively being pulled forward. People are buying homes now because they expect future rate increases.”

Fleming added that 5% rate reduces purchasing power for consumers about $20,000 for a typical homebuyer.

6% rates, he adds, could begin to see a dampening effect, but indicated in the interview that rising wages could help outset that sentiment.

Watch the full interview below:

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