The Impact of Rising Rates?
The business headlines this morning are trumpeting the fact that 10-year Treasury rates hit a five-year high yesterday and where the 10-Year goes, mortgage rates tend to follow. So it’s no surprise that the average rate on a 30-year fixed mortgage ticked up and 1/8 of a point on Monday and another 1/8 of a…
The business headlines this morning are trumpeting the fact that 10-year Treasury rates hit a five-year high yesterday and where the 10-Year goes, mortgage rates tend to follow. So it’s no surprise that the average rate on a 30-year fixed mortgage ticked up and 1/8 of a point on Monday and another 1/8 of a point yesterday to land at 7.125 percent, the highest it’s been since July 2006. (These moves come after a 6.6% rise in mortgage applications last week.) The big question on everyone’s mind is at what point do the higher rates start to negatively impact the New York City real estate market. This could just be another chance for brokers to start making the crazy argument that people should rush to buy now before rates go up. That one’s always blown our mind.
10-Year Treasury Yields Hit 5-Year High [NY Times]
US Mortgage Rates at Peak Since July 2006 [Reuters]
Mortgage Applications Index Rose 6.6% Last Week [Bloomberg]
You forget that the money in New York is virtually unlimited, its world unto itself, I am talking Manhattan and Brownstone Brooklyn at this point. When the average joe on Wall Street pulls down at least 500k interest rates don’t matter.
Price appreaction may slow in less desireabe areas where money is tight. But prime New York is never going down over the next 15 years barring a dirty bomb attack. Take that to the bank.
i dunno, the forced auction coming up for the four floor brownstone on pacific st in boerum hill looks interesting. starts at 1.5m. The boundary at which foreclosure world starts seems to be getting nearer every month. Obviously it isn’t going to get anyone a bargain home any time, but these things are all linked. property is a ladder – you can’t sell your smaller place unless the guy buying it can sell his smaller place, and so on down the line.
Lets wait for all those foreclosures!
Seriously – has anyone bought a decent NYC home at aucion. Has anyone bought a home at major reduction because the seller had to sell.
These are all myths in NYC. Sideline watchers will always be bench warmers. If you plan on staying in NYC for the long term, buying (if you can afford it) is always a good thing.
foreclosures in new york account for less than 1 percent of homeowners, 5:29.
please don’t be so ignorant.
5:21
I would like to counter that alot of the contributors to the boom in the re market are right here in ny. Many of whom have bit off more than they can consume( arms) I believe those that currently wait on the sideline can take short positions and purchase these houses of those who unfortunatley were not made aare of the volatility associated with arm mortgages.
– signed a homeowner
seriously 5:21….if i had anywhere near 7 figures saved up over the past 7 years, i coulda turned that into 8 figures, no doubt.
but it’s a lot more fun to sit on a pile of cash in a bank than have a beautiful home to live in, fix up, share memories in, have a sense of accomplishment in, no?
ha.
“too shay’ but i would counter that all those that are hoping for a reduction in rates from the fed are in for a rude awakening. Federal banks globally are all weary of the inflation monster and have all pledged (i.e england and japan) to raises rates to combat it. This will force the feds hand in America to raise the rates or risk losing foreign investors (strengthen the dollar)see China committment to purchase a 10% stake in Black Rock hence reducing their expenditures in U.S treasuries. however this process will further sink the American housing market even further.
12:57 – keep on waiting to see how things turn out. Hope you like your rental and you’ve got your 7 figure savings working for you, because you’ve missed out on a lot of fun over the last 7 years.
“currently weak status of the american dollar”
It is weak historically but actually the current news is that is is rising fast (from a low base) against yen and euro.. 10 week+ highs.. probably on the back of expected higher interest rates.
dollar appreciation due to higher rates I suppose drives away euro buyers.