With the latest rise in mortgage rates over the last month, many fear that home sales will decline as a result. The truth of the matter is that with the nominal rise in rates, that won’t slow down homes sales much at all. Many of the recent homes sales in Maricopa County have been sales from “cash” buyers. Many investors have helped to fill the gap with regards to the distressed housing market and many of those homes were purchased and now being rented. Many people who were effected by the economy and that had to short sale or foreclose on their home are now renting many of these “cash sale” homes.
While interest rates do effect the end mortgage payment for a buyer, rates will still have to dramatically climb, and house prices would have to continue to surge to make a true slow down happen.
Mortgage rates are still very affordable and continue to be in the 4% range and that still makes it very attractive for home buyers to continue to purchase. Many home owners have also been able to capitalize on this low interest rate environment and have been able to refinance and lower their current housing payment. With the housing appreciating, many others have been able to sell as a result and then take advantage of a new home at low interest rate as well.