Rates experienced another run-up this week. The 30-year fixed rate mortgage increased 9 basis points to 3.45% while the 15-year mortgage increased 5 basis points to 2.88%.
While most housing experts don’t anticipate interest rates rising past 4% (and the Mortgage Bankers Association 3.5%) through 2021, rates are steadily testing this limit. Should rates hit this benchmark, home prices may start seeing some effects. However, until then, the current housing shortage is doing enough to compensate for any pickups in rates. As of January, home prices are still appreciating at an astonishing rate of 11.2%. In the short-term, rate hikes could even be a good thing as buyers intent on locking in a good rate may feel more urgency to apply before rates climb even more.