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Rising Interest Rates - What this means for you

Interest rates are rising, is it time to panic? What does that mean for mortgages and what does it mean for house prices? Buyers are concerned that rising rates will mean that they can't afford the house they want. Sellers are concerned that rising rates will put downward pressure on home prices and erode their equity making it tough for them to move up into something bigger.


Here's the bottom line, rates haven't increased all that much, we're back to where we were before the summer of 2016 and still near historical lows for now, so don't panic...yet.


There are many things to consider, so let's start with the incoming Trump administration. Rates are heading up because people are hopeful about their economic prospects. This includes businesses and is a big reason we saw the run up in the Dow Jones average after the election results. If things continue to go well in the economy this year then there's a very good chance that rates will continue to increase.


We couldn't have low rates forever but you shouldn't lose sleep about rates increasing. If rates are going up because the economy is improving, chances are you're going to be making more money which means the higher mortgage payment will be offset by your higher income.


It's possible that rising rates will have a cooling effect on housing prices but in most areas of central and eastern Massachusetts, we have much higher demand for real estate and a pretty low supply which should keep prices from dropping. I believe prices will continue to appreciate but at a much slower pace then the last few years. That's not bad news, prices can't go up double digits every year. Incomes have to catch up to home prices.


Should you buy now?


If you have concerns about your job security or you're thinking about relocating to a different part of the country then you should hold off.


If you think you're ready to buy a house then my advice is do it now, don't wait! If you're waiting on the sidelines for the next big recession to hit so you can get a deep discount on a home, you're probably going to be waiting for a very long time. If you want a deal on real estate you're probably going to have to move your search to the west of whatever location you're currently looking at.  


The first step is to give us a call so we can discuss your objectives, explain how the process works, and then review some options with you. You may be able to buy sooner than you think, so give us a call at 508-986-6100, or by email at