Mortgage Rates Rise Above Eight Percent Mark
Posted August 9, 1999 7:00 a.m. EDT
RALEIGH — If you are looking to buy a home, you might want to do it before mortgage rates go up any higher.
Rates have climbed above the eight percent mark for the first time in two years, but they should not go too much higher.
It seems as fast as the "For Sale" signs go up in the Triangle, the "Sold" signs follow.
The housing market in the Triangle is booming like it is across the rest of the nation, but the rise in mortgage rates could quickly slow it down.
"It's not going to cause it to crash, but I think we'll see slower sales, less sales, less volume of sales in a year than we would have if rates stayed lower," said economist Mike Walden.
Economists say higher rates mean some home-buyers will have to look at less expensive houses. Others will not be able to afford one at all.
While the rates may slow down the market in the long term, we may actually see a rush on home sales in the short term with buyers trying to lock-in before rates go up any more.
Even if there is a slump, the president of theRaleigh-Wake Board of Realtorsbelieves the Triangle's economy is strong enough to withstand it.
"Due to the overall strength of our economy, the overall strength of our job market and growth in the area, I think we're still going to remain a strong real estate market even with increases in rates," said realtor Ross Rhudy.
While mortgage rates are the highest they have been in two years, realtors say they are still far from the double-digit rates of 10 years ago.
Economists say we are not expected to see those kinds of rates again any time soon.
The next hike could come at the end of the month if theFeddecides to raise interest rates. Economists say that could have a ripple effect.
Higher rates could hurt builders and the industries associated with new home construction.