Anyone who has an adjustable-rate mortgage knows that even a small change to interest rates can mean a big change to your monthly mortgage payments. Shortly before the end of last year, the Federal Reserve raised interest rates for the first time in awhile -- by .25 percent. The Fed has suggested that another rate hike could come this year.
While people who purchase multi-million dollar properties often don't need mortgages, first-time home buyers often do. Therefore, for New York residential real estate professionals, these interest rate increases could have a serious impact on their business.
Higher interest rates can bring down housing prices. They can also cause credit restrictions to loosen. Both of these measures can help attract buyers who may be put off by rising interest rates. Further, people who can afford to pay cash for a property may be more inclined to do so.
Before buyers, sellers and others get too concerned about this rate increase, it's important to remember, as one attorney notes, "Rates are still historically low, so now is as good as a time as any to pursue a new home."
Residential real estate professionals in New York have to contend with multiple factors that influence the market in our city, including housing prices, state and local zoning regulations, changing tastes and, of course, interest rates. It's essential to stay ahead of all of these trends and to be prepared to make smart decisions when an opportunity presents itself. New York real estate attorneys are there to advise people before, during and after their transactions.
Source: DNA Info, "Here's How Mortgage-Rate Increases Could Impact NYC Real Estate," Amy Zimmer, Jan. 18, 2017