Columbia SC housing is facing what some financial experts call "very concerning circumstances" when it comes to rising mortgage rates.
Peter Tchir of TF Market Advisors, a New York research, asset management, and consulting firm, puts it quite simply, "Rising rates are bad, particularly bad when it comes to one of the bright spots for the U.S. economy: housing."
How Rising Rates Affect Columbia SC Housing
Recent increases in mortgage rates adds roughly $90 to $100 onto the monthly mortgage payment for the typical $250,000 house. Rates for a 30-year fixed mortgage tend to track the 10-year Treasury rate very closely. Yields on the 10-year Treasury note hit their highest level in more than a year recently.
Although rates remain very low based on historical standards, Tchir thinks this is significant headwind for potential buyers who have been on the fence. And he counts a lot of people in that category given the lack of growth in high paying jobs during the economic recovery. Tchir points out much of the job growth post-recession has come from lower paying, service-oriented industries or in temporary services.
As for housing, mortgage applications (particularly for refinancing) have dropped in recent weeks. Tchir thinks we could see a real slowdown exacerbated if and when the Federal Reserve begins to taper its bond-buying program, which would remove support for Columbia SC housing.
Rates are likely to keep rising, but how far must rates rise before buying a home starts to look expensive relative to renting? At today's prices and rents, buying would be cheaper than renting until the 30-year fixed rate reaches 10.5%. At current 30-year fixed rates according to Freddie Mac, buying is 41% cheaper than renting nationally. With a 5% mortgage rate, buying is still 34% cheaper than renting nationally.
So even though rates for buying Columbia SC housing is on the rise, it's still a lot cheaper than renting. Contact us today for current rates and available inventory of homes for sale.
Could there possibly be a new Columbia SC housing bubble on the horizon? The latest S&P/Case-Shiller Home Price Index showed prices in the nation's 20 largest cities had the biggest year-over-year increase since May of 2006. Diana Olick reports for NBR that some are now worrying that we may be facing a new housing bubble.
Even though signs point to the Columbia SC housing crisis being over, 58 percent of Americans believe we are still in the middle of a crisis, and roughly one in five people believe the worst is yet to come. These statistics come from the MacArthur Foundation. Their "How Housing Matters" research initiative involved a telephone survey of 1,433 adults, conducted between Feb. 27 and March 10.
What do you think? Do you think we're on the verge of another Columbia SC housing bubble? We'd love to hear your thoughts and comments. (Your email address will never be displayed on this site, or used by us to contact you… so please go ahead and tell us what you think about a possible Columbia SC housing bubble.)
Columbia SC housing has been a tricky thing to predict over the past couple of years, with signs of improvement and then signs of economic retreat, followed by signs of improvement again. The big question is, is the crisis finally over, or are we on the verge of another bubble?
Columbia SC home sales are up, inventory is tight, mortgage rates are still low, Columbia SC housing starts and permits are up, and various indicators imply that Columbia SC housing is improving as the crisis has come to an end and everyone is trying to catch their breath before we begin running at full steam ahead again.
Even though signs point to the Columbia SC housing crisis being over, 58 percent of Americans believe we are still in the middle of a crisis, and roughly one in five people believe the worst is yet to come. These statistics come from the MacArthur Foundation. Their "How Housing Matters" research initiative involved a telephone survey of 1,433 adults, conducted between Feb. 27 and March 10.
With families and communities still reeling from the boom-and-bust cycle of the past decade, the public is recognizing that owning is not the only acceptable option anymore. 45 percent of current homeowners said they can see themselves renting in the future – not exactly a ringing endorsement for the housing sector. Fully 59 percent of homeowners and 67 percent of renters think "renters can be just as successful as owners at achieving the American Dream." Three in five said "the focus of our housing policy should be fairly equally split on rental housing and housing for people to own."
Is Another Columbia SC Housing Bubble On The Way?
Researchers at Redfin say the most common question their agents in the field are being asked is, "Is this another bubble?"
The company says that for now, it is not, but there are "mini bubbles" brewing in various parts of the country.
"Overall, the Columbia SC housing market this spring is hot, way hotter than any normal spring," Redfin reports. "For the most part, this is just the natural result of supply that is at record lows thanks to the price declines of the last few years."
To stay on top of Columbia SC real estate news… bookmark our Columbia SC Real Estate News page here found under Columbia SC Real Estate Categories to your right.
A new survey of bank risk professionals, when asked about Columbia SC housing, shows the originations space warming to the idea of expanding home lending.
Columbia SC Housing Prices Sustainable
Approximately 70% of the professionals surveyed feel home prices are rising at a sustainable pace, reaffirming that the Columbia SC housing recovery is real.
FICO and the Professional Risk Managers International Association surveyed bank risk professionals regarding their predictions for the next six months.
"The latest survey results, combined with data that indicates the real estate market is improving, not only in Columbia SC , but in many regions, paint a positive picture for a sector of the economy that has been slow to join the recovery," said Andrew Jennings, chief analytics officer at FICO and head of FICO Labs.
Meanwhile, 59% of bankers expect the supply of credit for residential mortgages to meet demand over the next six months, and 60% expect the supply of credit for mortgage refinancing to meet demand.
Jennings explained, "Mortgage lenders have been understandably guarded over the past five years. The improvement in their sentiment should be welcome news, and I wouldn't be surprised to see lenders cautiously expanding their mortgage and home equity lending businesses."
The survey found 84% of people believe that the level of mortgage delinquencies will decrease or stay the same, a significant improvement over last quarter.
Additionally, less than 20% believe the level of home equity line delinquencies will rise.
For more Columbia SC housing news, hop over to our Columbia SC Real Estate News under Columbia SC Real Estate Categories to your right.
There’s strong evidence that the Columbia SC housing market is roaring back. Homes are selling faster than they have in over 3 years, and this trend seems to be breaking out all over the country. ABC’s Diane Sawyer has the story…
Are there any other special features you’re looking for in a home other than those Diane mentioned at the end of her story? Tell us in the comment box below.
For more on the Columbia SC housing market, check out our articles and updates found under Columbia SC Real Estate Articles in the Columbia SC Real Estate News section, as well as the Columbia SC Real Estate Category.