This week mortgage interest rates took their biggest percentage jump in 26 years. The 30-year fixed rate mortgage spiked by 0.53 percent to 4.46 percent this week. The 15-year rate jumped 0.46% to 3.5 percent.
Rising Pending Home Sales
According to the National Association of Realtors® (NAR), in May pending home sales rose to their highest level since late 2006. NAR’s Pending Home Sales Index increased 6.7% to 112.3 in May, up from 105.2 in April.
Rising Interest Rates and Real Estate Investment
It’s true that mortgage interest rates have risen significantly in recent weeks. However, thinking back to just a few years ago, investors would have jumped all over sub-5% rates. It’s true that a rate increase of 1% on a $100,000 rental property mortgage will increase the mortgage by around $60/month, and this could reduce your cash flow by a significant percentage. However, the other effect is to drive investor competition out of the market, so you just may be able to make a better deal on a property to offset the mortgage rate increase.
Mortgage Rates Take Big Jump
This week mortgage interest rates took their biggest percentage jump in 26 years. The 30-year fixed rate mortgage spiked by 0.53 percent to 4.46 percent this week. The 15-year rate jumped 0.46% to 3.5 percent.
Rising Pending Home Sales
According to the National Association of Realtors® (NAR), in May pending home sales rose to their highest level since late 2006. NAR’s Pending Home Sales Index increased 6.7% to 112.3 in May, up from 105.2 in April.
Rising Interest Rates and Real Estate Investment
It’s true that mortgage interest rates have risen significantly in recent weeks. However, thinking back to just a few years ago, investors would have jumped all over sub-5% rates. It’s true that a rate increase of 1% on a $100,000 rental property mortgage will increase the mortgage by around $60/month, and this could reduce your cash flow by a significant percentage. However, the other effect is to drive investor competition out of the market, so you just may be able to make a better deal on a property to offset the mortgage rate increase.