Yes, you read that headline right. There is more than just bad news associated with rising interest rates as the housing market continues to grind toward recovery. While it's easy to understand the advantages of low interest rates, it's not common you hear the other side of the story. That's why we've outline 4 good things about rising interest rates in our housing market:
Today's mortgage rates are still extremely low
It's no doubt that even at 4 %to 5%, interest rates for home loans are still at historical lows. A slight increase in rates at this point hardly affects home affordability and most housing markets are still standing strong.
Improving Economy
According to many experts, rising interest rates directly correlate with a rising economy. Increases in mortgage rates is a sign that consumer confidence is rebounding and that consumers are better able to pay higher interest rates. Higher interest rates suggest that uncertainty among investors is also improving.
The return of home purchase mortgages
Higher interest rates usually shifts the paradigm away from home refinancing and towards purchasing a home. With higher demand in home mortgages and more competition between mortgage lenders, homebuyers are more prone to receive relaxed lending requirements. For those looking to finally get into a home or upgrade to a new home, it's the perfect time to do so still.
Sellers are in a great position
Homeowners that are looking to sell their home in the current market, demand is standing tall. With rising interest rates and also increasing home prices, many home buyers are ready to jump on the homeownership band-wagon in order to avoid paying even higher rates or fees down the road. Home sales in the United States are the highest we've seen in almost six years and that trend will likely continue through the rest of 2014.
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