We’ve been warning that the sudden rise in mortgage rates was going to create a great deal of buyer sticker shock. It’s already virtually halted refis.
Even though the increase is arguably from a low base, homebuyers tend to max out on their purchasing power. And we’ve also given reports from brokers that the rise in costs is even larger than the apparent rise in interest rates for important categories of purchasers, since the FHA stopped waving points.
Further confirmation comes from the Urban Turf website:
UrbanTurf polled prospective homebuyers to see if the jump in rates had resulted in a delay in their housing search.
The results were revealing. Of the several hundred buyers who answered the poll, 38 percent said that they would be putting their search on hold because of rising rates, while 57 percent said that they would keep looking. (5 percent were unsure how the rate spike would influence their decision.)
Mind you, while 30 year fixed rates (per Bloomberg) have backed a bit off their last Friday recent peak, at 4.54% they are still above the level cited in the Urban Turf poll.
Rest from Naked Capitalism here…