Saturday, June 06 2009
EVANSVILLE - If you're buying or selling a home, mortgage rates could be a make or breaker. And recent spike in mortgages rates are leaving many analysts to say it's enough to discourage potential homebuyers.
Mortgage rates recently hit 5.5%, a far cry from when they were just over 4.5% earlier this year. This increase could potentially add hundreds of dollars onto a monthly payment.
Even with these higher rates, F.C. Tucker sales manager, John Briscoe still describes the Tri-State housing market as being strong.
"I still think rates historically are very low, and I still think people are definitely pretty confident," Briscoe said.
He says he's seeing all kinds of buyers right now. Anywhere from first time homebuyers to what he calls "the move-up buyer" who are looking well within the $300,000 range.
"People are just now confident," explains Briscoe. "Prices have corrected and I think everyone has realized it's a great time to buy."
Many sellers like John Briscoe believe this mortgage rate increase could get a lot of homebuyers off the fence. They can either buy now, or take the chance of paying an even higher mortgage rate in the future.
But Briscoe tells NEWS25 no one is in the clear. He predicts interest rates could go as high as 6.5% sometime soon.
"If we get over 7.5% to 8%, that would make me a little bit nervous," Briscoe said.
Scott Hyatt with Summit Real Estate Services not only buys properties, but also sells. He thinks the higher the rate, the "less of a house someone is going to be able to buy".
"It makes a very nice market to invest into," Hyatt said. "Ask your parents what their rate was when they bought a house 25-30 years ago. It's probably the same thing."
He tells NEWS25 even with the rate increase, he considers the Tri-State market a "lagging economy" - never too high, never too low.
"We'll probably go back to levels where we were in 2003, 2004," Briscoe predicts. "I don't know if we'll see in the foreseeable future another spike up like we did in 2006".
Before this week's increase, mortgage rates so far this year had not gone over the average of 5.25%.
Many analysts say as the government issues more debt the higher the mortgage rates are likely to go.