Waves in housing market

After the election of President-elect Donald Trump, mortgage rates shot up, and the 30-year fixed-rate mortgage hit nearly 4%, according to the weekly survey from Freddie Mac.

This increase is directly impacting the housing market as buyers begin to see the effect of the changed rates, according to an article by Diana Olick for CNBC.

For some homebuyers, this sudden jump could keep them from closing the deal on the home they want.

From the article:

Mortgage rates are still historically low, but crossing over from the 3% range to the 4% range means more than just a $50-per-month difference in payments. It means some buyers will not qualify for the strict debt-to-income ratios lenders now require. It also means potential buyers are more nervous about taking the plunge at all.

Salem Five Bank vice president Jason Anker gives homebuyers advice on how they should approach the housing market now that rates are increasing.

From the article:

“I tell people, interest rates are 80% psychological and 20% math. I do the math for them and their next reaction is, ‘Oh that’s all?’ Forty dollars a month, $75 a month. They initially think it’s going to be a lot more painful than that,” said Anker, who added he hasn’t lost any deals yet. “I am concerned. My advice to clients right now is to be extremely defensive.”