If you’re in the market for a new home in the Houston area, you’re probably conflicted at the news that mortgage rates are rising. Record-low 3% mortgage rates are quickly becoming a thing of the past and it means at least two things: you might face a higher mortgage payment, but you may also have less competition for homes.
Low interest rates created a frenzy in Houston, and other Texas housing markets, leading to bidding wars, record sales, and low inventory. However, according to this CNN Money article covering the recent increases, rising interests rate might not be such a bad thing in the bigger picture.
In a nutshell, higher interests rates could mean that the overall economy is making a comeback. Low interest rates were intended, in part, to bolster the real estate market. Since the economy is doing better overall, the Fed will stop propping it up and slowly back away until it can stand on its own. This is good news for all of us.
On the other hand, rising interest rates could lead to a rush on the real estate market as people try to take advantage of low rates while they still can. In cities with strong markets, like Houston, the real estate sector could intensify before it starts to cool. So, if you’re a buyer looking for a home in Houston, you may want to brace yourself.