For the first time since May 2010, the national average for a 30-year fixed-rate mortgage loan rose about 5 percent, indicating it may soon become more expensive for prospective homebuyers to finance a new property acquisition.
Rates climbed to an average of 5.05 percent for the week ending February 11. However, experts say this may only affect consumers who are trying to refinance, as the record-low financing rates seen over the last few months could soon be a thing of the past.
Many housing market analysts say home values tend to decline when financing rates climb. This helps the industry offset the increase and attract more buyers, CNN reports. In addition, these experts say buyers who have been thinking about entering the market may want to consider making a purchase as upcoming changes could affect the industry.
“If you’re thinking of buying a house, you’re probably better off buying in this reasonably certain lending environment than in the rather uncertain environment that’s coming,” Keith Gumbinger of HSH Associates told CNN.
Over the course of the next year, a number of federal programs will likely decrease the number of foreclosed homes on the market, leading to fewer deals for buyers. The government is also expected to release control of Fannie Mae and Freddie Mac, which could also affect prices.