How Will Your Real Estate Business Be Affected by Higher Mortgage Rates

By
Mortgage and Lending with LeaderOne Financial Corp. NMLS 124492

It seems as if everyone has finally come to the consensus that mortgage rates have only one direction in 2010 and that is up. Many will also agree that as mortgage rates continue to rise that home affordability will decline as they are inversely related.

What isn't so clear is the relationship between higher mortgage rates and the overall impact on real estate transactions.

I was watching CNBC's Diane Olick - Daily Realty Check for an update on Commercial Mortgage Backed Securities early this afternoon. Although the delinquency rates are even more frightening in commercial real estate, the tail end of her update is what Realtors in the residential arena really need to pay attention.

Did you catch that?

Mortgage applications hit a six month low as mortgage rates increased during the holiday week of Christmas. 23% less as mortgage applications came to a halt. It should be noted that since mortgage rates hit their all time low near Thanksgiving weekend, a 30 year fixed home loan rate had increased by 0.500% - 0.625% to end 2009.

If a half percentage increase in residential home loan rates could impact mortgage applications by 23 percent...

How Will Your Real Estate Business Be Affected by Higher Mortgage Rates?

 

Five Recent Blog Posts of Interest:

  1. This Is The Week Ahead for January 3rd
  2. Weekly Blog Update for the Week Ending January 2nd
  3. Will You Make A Difference with Your Life in 2010
  4. Don't Miss Virtual RE BarCamp on January 4th
  5. How Will Higher Mortgage Rates Impact the Housing Recovery

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Topic:
ActiveRain Community
Location:
Indiana Lake County
Groups:
Active Rain Newbies
Mortgage Bankers
Realtors®
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Tags:
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Comments 5 New Comment

Show All Comments
Rainmaker
231,945
Sara Woolford & Steve Golson, ALHS
iTexas Realty Co.

Hi James-

Just saw this post come through on Twitter.  Yow!  I have had business in this week, but my heart goes out to those who don't.  I'd like your opinion, Do you personally account some of this to the extreme winter weather?

--Sara in San Antonio

 

January 08, 2010 12:11 PM
Rainer
69,685
James K Barath, CMPS
FICO Pro, Certified Military Housing Specialist
LeaderOne Financial Corp.

Sara - I think it happened to be a combination of the higher mortgage rates, seasonal/holiday mindset and extreme weather throughout the country.

January 11, 2010 12:32 PM
Rainmaker
231,945
Sara Woolford & Steve Golson, ALHS
iTexas Realty Co.

Hi James-

Thanks for your response.  It is really difficult to predict what may be happening this year on a national basis and how that will affect buyer sentiment. We are waiting to see and getting our motivated people moved as quickly as we can; before we see rate changes.

--Sara

January 11, 2010 01:20 PM
Rainmaker
881,825
Jane Peters
Connecting you to the L.A. real estate scene
Power Brokers Int'l

That was staggering - commercial delinquencies up 500% and hotels 900%.  Who even knew about hotels....  These are strange times.

January 17, 2010 02:38 PM
Rainer
69,685
James K Barath, CMPS
FICO Pro, Certified Military Housing Specialist
LeaderOne Financial Corp.

Jane- I would think that commercial delinquencies would be an even bigger issue for metropolitan areas such as yourself in Los Angeles. I'm sure that the strategic defaults by big banks such as Morgan Stanley and the exodus of corporate headquarters has not helped either.

January 17, 2010 02:50 PM
Show All Comments
Rainer
69,685

James K Barath, CMPS

FICO Pro, Certified Military Housing Specialist
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