Interest Rate Jump Hurts Home Buyers

Since the election, mortgage interest rates jumped 1/2 percent, according to a briefing this morning from one of our mortgage partners.

“Interest rates should increase gradually during the next four years under a Donald Trump administration, which could dampen growth in the housing industry, economists and housing experts predict,” according to The Street, an online economic blog.

It’s already happening. Rates offered to borrowers with excellent credit jumped to 4.25 percent for  30-year fixed-rate loan. That’s a real shock to consumers used to rates starting in the 3-percent range. The new numbers are low by historical standards — yet psychologically, it hurts.


It also cuts into consumers’ buying power. The lender I spoke with explained that a half percent adds about $44 per month to the payment on a $200,000 loan.

That may not sound exorbitant. Over time it adds up. And, it cuts buying power for many clients. Depending on their income and credit rating, every incremental increase in mortgage interest rates means they can afford less house.

Various economic websites are using “skyrocketing” “relentless move upwards” when talking about recent spikes in interest rates. Will rates continue to rise? I have no crystal ball. In one weekly report, 50% of economists said “yes” If that happens, buyers will afford less house.

25 Back 4 10611 Buckhorn Ridge Ct. High Res (36 of 59) Back

10611 Buckhorn Ridge, Truckee, NV $2,999,000

How does that impact buyers? Higher interest rates mean higher monthly payments and it will take a higher income to qualify for the amount a consumer could get last week.

How does it impact sellers? By shrinking the buyer pool. Will it hurt list prices for homes?  Not immediately. Logically a sustained increase in mortgage rates has to effect sellers.

  • Will it spur buyers to lock in a rate before they climb even higher?
  • Will it price buyers out of the market?
  • Will sellers have to lower the property price? Will they negotiate more?

What do you think? Let me know!

Holly O’Driscoll, Chase International Real Estate, Reno, Nevada. Call/text: 775-762-7576



NBC’s Redesign — The Ruin of a Trusted Online News Site

Does anyone else out there hate the redesigned NBC News website? It looks like a Pinterest page … all big photos, no information. I am a self-proclaimed news junkie, veteran journalist interested in national and world news — as well as what happens in my city and state.  The new format repels me — the NBC News site used to be one of my top spots for a quick headline check.  Now I avoid it — even CNN’s website is better.

My first journalism job was a summer internship with WGBH-TV in Boston. Back then, the station had a live 10 o’clock news program — I ran the teleprompter and worked in the control room. I only went out on a few stories … but it was fun and I learned so much! I found WGBH a great experience for a complete novice. The news staff was generous with their time and information. I graduated from college thinking I wanted to become a TV news producer — not necessarily the on-air person, but the editor making all the decisions behind the scenes.

Circumstances landed me in Washington, D.C. — a mecca of political news. My first newspaper was USA Today. It was a brand-new (and much-ridiculed) concept at the time. I worked on big stories, learned about the power of big money and of cut-throat politics  — both inside the company as well as on Capitol Hill!

Top execs and politicians play hardball — very few manage to succeed without making serious ethical compromises. It’s reality. Those in the line of fire must constantly out-maneuver the competition to get ahead, or even just to keep their jobs. Those who don’t end up on the curb. I contend life outside the bubble — in a “real” community — has much to recommend it. Politics, ambition and money play a role in every city …  but usually on a more manageable scale.

I still keep up on the old rat race — the Washington Post, Politico, The Daily Beast, Slate, ABC, CBS, CNN — but rarely NBC anymore. I miss the old “news” format. I’m not the target audience, obviously. I wonder who is? My guess: People who care about photos, not facts, not perspective, not NEWS.

I wonder what the user statistics will reveal. I used to check it at least twice a day — sometimes lots more. Now, maybe once a week — and I haven’t clicked on a single story.

I read one comment that said it was as if Pinterest swallowed Windows 8 then vomited — I agree!

What do you think?  Are you a fan? Tell me what appeals to you about the new format.

Hate it? What should they do instead?