Rising mortgage rates could have a big impact on the direction you choose when shopping for real estate, economists warn. “Every time the interest rates go up, you eliminate a group of people who can no longer afford to buy a house,” Don Frommeyer, a mortgage broker at Marine Bank in Indianapolis said, “Some people may have to rent for a period of time until they make more money—or buy a smaller house.”
To avoid further complications in their plans, you may want to speed up the home search this spring, as interest rates are forecasted to move higher in the coming months. Forty-four percent of home buyers say rate increases likely will force them to settle for a smaller, less expensive home that requires a longer commute to their jobs. First time buyers may be the most affected by the cost, as increasing home prices and interest rates price some out of the market.
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