Will the recent jump in mortgage rates lead to further price reductions for homes? A look at history offers some answers:
From the period of June 1979 to April 1980 mortgage rates went from 11% to 16%. During the period 1979 to 1981, home prices rose 15%.
In 1987 mortgage rates went from 9% to 10.5%. That same year, home prices rose 9%.
In 2003, mortgage rates rose again and prices rose by 42% over the next three years.
We have all heard that history has a way of repeating itself. If so, we cannot expect with certainty that prices will fall further due to mortgage rates rising. Other factors, such as jobs, incomes and economic growth will likely determine what happens next.
If considering a home purchase, why not let history be your guide? As news of an economic recovery continues to present itself, both mortgage rates and home prices are likely to rise. Even if prices move lower, the rise in interest rates will most likely offset any benefit from a lower purchase price.
It is crucial to obtain legal guidance from an experienced real estate attorney when considering a purchase of real estate. The Law Office of William J. Reinhardt, Jr. has been assisting buyers and sellers of real estate in NY and NJ for 26 years. Call 718-377-8880 or e-mail firstname.lastname@example.org to arrange for a free consultation to discuss your transaction.