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]
everyone needs to calm the eff down.
even in the rest of the country where the market has stumbled, it’s not a disaster. things are still fine. the world is not coming to an end.
some of the worse markets like phoenix are in fact starting to pick up again a little bit.
chill out. the market goes up and down. if it only went one way, it wouldn’t be a MARKET.
people are in love with new york. and with good reason. it’s become an incredibly desirable place to live. i love it and will continue to speak highly of it instead of those that seem to live here and predict and wish the worst of it and its citizens.
11:44 get your facts straight foreign investors have moved their capital out of the bond market that explains the cause of the rising yield in the 10 year bond market. These investors are afraid of the i word ( inflation) and have chosen to invest money in overseas market in addition to the currently weak status of the american dollar. I believe that due to the recent poor performance of the subprime sector many banks who feasted on providing loans to that segment of the market will eventually fizzle out. Those that are able to survice under the current economic environment will tighten lending standards, which will eliminate many people from the market. This I believe will lead to a decline of prices.
Didn’t we go through this RATES GOING UP conversation about 2 years ago. What was the net effect of that activity.
NYC real estate keeps on moving along, with an occasional bump, but unlike the rest of the country it has not gone down the tube. Obviously we all understand that we can’t expect the growth of the early 2000s, but it’s still a strong market.
Has anybody actually spoken to their mortgage broker lately? Higher rates are only part of the story – you’ll also find tighter lending terms all around. It’s not just a question of what you might feel comfortable paying monthly – as an earlier post suggests – but would-be borrowers are going to find their maximum loan amounts have also come down a good amount. This isn’t solely because of the higher monthly payments but also reflects a tightening of the loose credit terms which have fueled the recent valuation surge across many asset classes – Brooklyn real estate included.
Sellers should be prepared to see bids fall apart once buyers figure out they aren’t as rich as they thought. And for those who argue that cash buyers mean financing is irrelevant – who do you think the cash buyers are bidding against?
ya anon 3:09 and I’m sure whoever bought your place will see the same appreciation that you did, no probably even more. Get a clue.
“mega-trends such as reverse migration by younger families” – this in not accurate. It is anecdotal at best.
Growth in NYC population is due to immigration. Moving to suburbs is still very much the norm. Don’t kid yourselves just because there is a definite subset of the demographic that prefers city life.
i suppose i didn’t realize the market was going down in nyc 2:57.
thanks for letting me know though. i appreciate it.
maybe you can tell the folks (3 of them) that bid over ask on my place in park slope 2 weeks ago??
awesome, thanks.
I just refinanced my coop into a 6.25%. I feel good. The problem is, that was all based on a plan to sell it in a year and hopefully get a house. I think I’m out of luck now, because the prices on my coop sale will go down, and the houses will stay more stable, and the interest will be too high to squeeze out a two family payment even with a renter.
Thank goodness i like my 1.5 bedroom with deck top floor walkup.
Sorry should be “is not”.