Mortgage rates continued to spike this week in the aftermath of the election. Over the past few days, mortgage rates shot up to 4.02% on Tuesday, up nearly a percentage point since the presidential election, the rate spike is the highest since the 2013 and 1987 rate spike.
The long-term interest rate hike was led by a surge in bond yield because of Trump’s victory in the recent election or it could be a continuation of a trend that’s been in the works for a long time.
The latest rate spike creates a dilemma for many potential home buyers. The increase is nearly a percentage point but if you think about paying that extra tiny bit of point on a $250,000 loan over the course of 30 years, that could end up costing buyers thousands of dollars. As a result, the Mortgage Bankers Association data says that mortgage applications for new sales jumped 13% in the week ended Nov. 18, compared with the previous week. Home buyers are rushing and jumping in to buy a home for fear that rates will only rise further.
Is the rising interest rate pose a threat for borrowers? Financial experts say don’t panic. Mortgage rates are still incredibly low by historical standards. Although rates may continue to rise, they’re not expected to keep shooting up.
In Greenville, during a seller’s market where a newly listed home gets multiple offers the same day it was put on the market, mortgage hike might not be entirely bad. Higher interest rates knock some potential buyers out of the market, shifting the demand back toward the buyer.