Rising mortgage rates could impact Houston real estate market
With mortgage rates surging in the final week of June, activity in the Houston real estate market could be affected.
As the Federal Reserve announced it would be begin tapering its bond purchases later this year, both 15- and 30-year fixed-rate mortgages saw averages surge in the week ending June 27, according to Freddie Mac's latest Primary Mortgage Market Survey.
That being said, it wouldn't be a surprise if home buying activity slowed a bit, but Freddie Mac vice president and chief economist Frank Nothaft said home affordability remains high.
"Higher mortgage rates may dampen some housing market activity but the effect will be muted by the high level of buyer affordability, and home sales should remain strong," he said. "For instance, existing home sales in May rose to its strongest pace since November 2009 and new home sales were the most seen since July 2008."
Fixed rates have been on the rise for much of the past two months, which has led to a marked dip in refinancing. The Mortgage Bankers Association reported a 5 percent decline in refinance applications during the week ending June 21, but purchase requests were up 2 percent.
Though rates are increasing, reasonable purchase prices and surging rental rates should keep drawing buyers into the Houston real estate market.
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