{"id":8135,"date":"2015-05-15T06:00:35","date_gmt":"2015-05-15T11:00:35","guid":{"rendered":"http:\/\/olduvai.ca\/?p=8135"},"modified":"2015-05-15T06:00:35","modified_gmt":"2015-05-15T11:00:35","slug":"what-if-mortgage-rates-go-up","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=8135","title":{"rendered":"What If Mortgage Rates Go Up?"},"content":{"rendered":"<h3 class=\"art-postheader\"><a title=\"Permanent Link to What If Mortgage Rates Go Up?\" href=\"http:\/\/www.acting-man.com\/?p=37423\" rel=\"bookmark\">What If Mortgage Rates Go Up?<\/a><\/h3>\n<p><strong>From 4% to 5%<\/strong><\/p>\n<p>If the 30 year mortgage rate increases by just a quarter percent to 4.25%, monthly payment increases by 3%, which may only have a minor impact on the market. Half a percent to 4.5% would increase payments by 6.13% and that may start pushing marginally qualified borrowers into the \u201capplication denied\u201d pool. With a 1% increase, from 4% to 5%, the monthly payment goes up by 12.44%. Needless to say, in order to qualify household income would have to increase proportionally. That should put a real damper on purchases, especially at the entry level.<\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"http:\/\/www.acting-man.com\/blog\/media\/2015\/05\/30-year-fixed-rate-log-scale.png\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-37417\" src=\"http:\/\/www.acting-man.com\/blog\/media\/2015\/05\/30-year-fixed-rate-log-scale-1024x601.png\" alt=\"30 year fixed rate, log scale\" width=\"600\" height=\"352\" \/><\/a>The 30 year fixed mortgage rate average, 1979 \u2013 2015, log scale, via Saint Louis Federal Reserve Research \u2013 click to enlarge.<\/p>\n<p><strong>Scrambling to lock-in rates<\/strong><\/p>\n<p>Builders may be particularly vulnerable in this environment. They may see a higher cancellation rate, or may have to offer some concessions to keep deals together. Qualified buyers may become marginally qualified buyers, with less incentive to buy.<\/p>\n<p><strong>What about refinances?<\/strong><\/p>\n<p>With rates being so low for so long, there are not that many procrastinators left. Those who have not refinanced in the last couple of years are probably not qualified to do so because of lack of equity, or income, or unfortunately they may not fit into any of the many easy refinance programs. If rates go up, say, by 1\/2% or more, I expect not to see just a decline, but an abrupt stop to refinancing.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What If Mortgage Rates Go Up? From 4% to 5% If the 30 year mortgage rate increases by just a quarter percent to 4.25%, monthly payment increases by 3%, which may only have a minor impact on the market. Half a percent to 4.5% would increase payments by 6.13% and that may start pushing marginally [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[195,303,305,1583,421,431,4869],"class_list":["post-8135","post","type-post","status-publish","format-standard","hentry","category-economics","tag-debt","tag-fed","tag-federal-reserve","tag-housing","tag-income","tag-interest-rates","tag-mortgage-rates"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8135","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8135"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8135\/revisions"}],"predecessor-version":[{"id":8136,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/8135\/revisions\/8136"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8135"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8135"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8135"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}