ROCKFORD (WIFR) – Rising mortgage rates are surprising more home buyers into action. For just the fifth time since the recession began, more than 400 homes were sold in the Stateline in August, according to a new report from the Rockford Area Realtors Association.
This is good news for homeowners because it’s helping drive up home prices. The three month rolling average hit $114,000 last month, but for home buyers, Freddie Mac says the 30-year mortgage rate hit 4.46%, a two-year high and those numbers could go up even more if the fed reduces their bond-buying program in the next few months.
"People will be more concerned, so okay our interest rate is going up that means our monthly payment may go up. That again, it's proven, will probably stimulate some interest to lock in sooner rather than later so you get the lowest interest rate possible,” said Rockford Area Realtors CEO, Steve Bois.
Bois says the fact that we have a more affordable housing market than many other cities should help us continue down the road to recovery.
ROCKFORD – Rockford area homebuyers leapt into action in August as mortgage rates climbed to a two-year high, with total home sales and the average price reaching new highs in the current housing recovery. The three-month rolling average price hit a 32-month high at $114,774 in August, the highest monthly average since $117,520 in January 2011. The July 2013 price was up 2.3 percent from $112,170 in August 2011, marking eight out of the last nine months of year-over-year price increases.
For only the fifth month since the housing recession began in 2008, monthly total sales rose above 400 properties in Winnebago, Boone and Ogle Counties. Housing sales were up slightly from 401 in August 2012 to 407 this past August. Year-over-year monthly sales have been up 10 out of the last 12 months.
“Rising interest rates may be helping drive more home buyers to action,” said Steve Bois, CEO of Rockford Area Realtors. “Rockford area buyers snapped up more homes in August than any month since last October.”
The 30-year mortgage rate hit 4.46 percent in August, according to Freddie Mac, the highest since 4.55 percent in July 2011. The 30-year rate hit an all-time low of 3.31 percent in November of last year, with the run up to the current two-year high occurring in the last three months.
“Rising rates could affect the housing market going forward,” Bois remarked. “With home prices increasing and interest rates projected to continue increasing, the cost of
buying a house could quickly increase rather dramatically.”
A recent survey by real estate company Trulia found that an increase in mortgage rates was the prime concern among 41 percent of consumers, who worried about that more than housing price increases (37 percent of consumers).
Housing experts are likewise concerned that the Federal Reserve will taper its government bond-buying program in the next few months, pushing up interest rates in the
improving housing market.
“Just a year ago, Americans were worried that the weak housing market would hinder economic recovery,” Bois said. “The U.S. housing market has grown stronger than
expected, and is one of the key factors paving the way toward economic stability. Now we’re becoming somewhat concerned about sustaining this resurgence. However, having
a high housing affordability factor in our market should help us.”