It is a question that many prospective homebuyers may be asking themselves.
Since the Republican Trump won two weeks ago, bond yields have surged, which has sent mortgage rates higher. A typical 30-year fixed-rate mortgage was at 4.125 percent on Friday, the highest since July 2015, according to MortgageNewsDaily.com.
It also was more than half a percentage point higher from the average on Election Day.
Meanwhile, the 10-year Treasury yield was about 2.33 percent this morning compared with about 1.88 percent on Nov. 8.
If rates go up too high too fast, it could negate recent gains in home prices. Higher rates also can limit what buyers are able to afford, which may limit the pool of buyers in some price ranges.
But we’re not there yet, midstate Realtors and lenders say.
Craig Hartranft, a Realtor with Berkshire Hathaway HomeServices Homesale Realty, said he’s seen steady market activity so far this month, despite the rate hikes.
Over the first two weeks of November, 225 homes went under agreement in Lancaster County, he said. That was up from 189 last year.
York and Adams counties also are steady.
“The looming interest rate increase is a concern but I am not seeing a rush to purchase property,” said Tony Thomas, president of the Realtors Association of York and Adams Counties.
The timing of the rate increase hasn’t had a real effect, he said, as people are paying more attention now to holiday shopping. And while rates are up, they remain at historic lows.
“The market, in general, is reacting to an anticipated rise in Federal rates in December and expected volatility over the next several months, both of which are factors influencing long-term mortgage rates,” said Dave Green, director of mortgage services for First National Bank. “However, we would also note that mortgage lending for financing homes has a tendency to slow down at this time of year due to the holiday season.”
Nevertheless, Thomas said he expects higher rates will impact the younger millennial buyers more because they already are being held back by lower wages and high student debt.
Ryan Scott, market leader for Movement Mortgage LLC’s southcentral Pennsylvania region, expects the opposite. He thinks 2017 will be the year of the millennial purchase as more people start having families and the economy strengthens.
“I think the nation has reached a consensus that President-elect Trump will have a positive impact on the economy,” he said.
Scott said the rising rates now should be a “call to action” for prospective homebuyers who may have been sitting on the fence. Scott and Green are advising people looking to buy or sell homes to lock in on current rates, if they are concerned about ongoing rate movement.
“To wait might not be the best idea,” Scott said.
However, he and other real estate professionals don’t expect rates to go too much higher. Scott said a “comfortable place” for the housing market is under 6 percent. If rates go any higher, the housing market probably gets weaker, he said.
Whether the rates go that high is anyone’s guess, he said. There could be continued volatility as the markets react to Trump and he begins to roll out fiscal policies. That could include a looser lending environment, which could attract more borrowers while also boosting the risk of more foreclosures.
The midstate housing market has been steadily rising over the last five years. Local Realtors have been saying they expect the growth to continue under a new administration.
“Moving forward, I believe that in 2017 we will see more homes sold and higher home sale prices even with a rate increase or two,” Thomas said. “The demand for housing and the shortage of inventory will continue despite a rise in interest rates.”