Will Higher Interest Rates Hurt the Housing Market in San Bernardino County? by MRshortsale

Broker #01131378

 Your Inland Empire Source of Real Estate News by MRshortsale, aka  Hector D. Martinez, Broker/Owner Mission Realty Services


According to CEO Ara Hovnanian of Hovnanian Enterprises, the Federal Reserve's decision to end the purchasing of mortgage backed bonds, which in turn caused interest rates to increase from 3.25% to 4.25% overnight last week, should not impact the hosing industry negatively. On CNBC today (07/02/13), Hovanian "expressed little concern ... as long as it doesn't go up in a shocking way." In essence, Hovavnian, a large developer of single family residences, stated that "housing demand is driven by population and household growth, so demand for shelter will only increase as the population and households alike swell." Southern California is included in those areas of the greatest rising home prices in the nation, and Hovanian believes that will likely continue.

 Are the rising interest rates a coincidence, or a well coordinated federal decision? At a TIGAR  appraisal class on July 1, 2013, the increase in interest rates was linked to the new wave of buyers. These new "buyers" are the ones who sold their homes in a short sale in 2008 and forward, and now are ready to enter the market as new home purchasers. Although rates have gone up to over 4%, buying a home is a top priority to these new wave of buyers. And it appears they made a great decision - they got rid of tens of thousands of negative debt only to repurchase with no negative debt.

What do you think? Have higher interest rates changed your decision to buy now? Or to sell now? Let me know what you think.

If you know anyone who wants to get the banks off their back and either do a loan modification or short sale, refer them to me and I'll give them 100% sound advice so they they may be able to repurchase their new home in the near future. Peace.

Broker Mission Realty