Even the slightest movement in mortgage rates can translate into more or less of a buyer’s purchasing power. Currently rates are still historically low however it looks like they could be going up. The Federal Reserve is planning to raise rates in the second or third quarter of this year but timing remains unclear. The big question is whether the Fed will vote for an interest rate hike on mortgages to take effect in June.
If they do, expect jam-packed open houses and less inventory. Russ Whitney claims that as rates go up, people qualify for less, so you’ll probably get a smaller house. If you're a seller, you may find your open house slightly busier this spring especially when there’s rumblings of an interest rate hike, it causes a scare among buyers and people go out to look at properties. It gives sellers more leverage, because buyers want a place and they want it quickly before rates potentially rise.
If the increase happens, between now and June you'll see buyers that are on the fence more likely to follow through on the spring market. People will try to get in before rates rise and we might see prices rise. Sellers will still, for the most part, have the upper hand. For those who considering putting their home on the market this spring should take advantage of this mini-rush.
For More Details: Russ Whitney Real Estate Mortgage Rules