A sustained upswing in mortgage interest rates is likely to be felt by current and would-be homeowners alike, denting mortgage affordability in many large markets and complicating the financial decision on when or whether to move to a different home house. ...
But rates have also risen almost 50 basis points since the start of the year, and look to finally be at the beginning of a sustained upward trajectory that has been expected for the past several years. In seven large U.S. markets, including four of California’s largest markets[2] and Denver, Portland and Miami, mortgage payments already take up a larger share of income than they did historically. In San Jose, among the nation’s hottest and priciest markets, the share of income needed for mortgage payments increased from 36 percent historically to 46.1 percent at the end of 2017. Combined with record-high home prices, housing affordability is already suffering in these markets and will only worsen as rates climb.
Houses have always been cheaper for those with cash. A mortgage brings origination fees and points, which if "seller paid" are just added on to the house price.
Rising rates will normally cool the stock market since there will be other places to save. This will reduce the single-minded dive into real estate as the only place to save. In addition, rising rates will necessarily lower purchase prices to make them more affordable. Since the government artificially created this bubble starting in 2008 with extremely low rates, this is the best news for potential buyers in 10 years.
Zillow is just as single-minded as your realtor: to them, prices ALWAYS MUST go up
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