NORTHAMPTON, Mass. (WWLP) – Mortgage rates saw a spike after the election. Rising mortgage rates can do three things, price people out of the market altogether, put more pressure on them to buy before they go even higher, or price people out of more expensive homes.
The average rate for 30 year fixed mortgage spiked four-tenths of a percent, the biggest increase since 2013.
David Murphy of The Murphy’s Realtors in Northampton told 22News that the rate that banks borrow money at may increase but that doesn’t necessarily mean they’ll pass the expense on to you. He also said now may be the best time to buy. “If you are looking to buy something. If you find a house that is left over from the 16′ season and it’s still around, the owners are probably willing to deal and the rates are still good. But they can’t stay this way forever.”
For $200,000 home, a mortgage increase of 4-tenths of a percent results in roughly a $56 a month increase. Most experts agree you shouldn’t panic.
Rates remain at historic lows, but the prospect of more government spending, borrowing and higher inflation is what’s causing the increase.