Jumping interest rates -- impact?

it could cause a temporary increase in buyers, particularly those who are close to the limit of their monthly buying power (although they probably shouldn't be buying). brokers certainly are talking up that issue (makes one wonder what they'll say once the rates do increase, if they do so appreciably). As 30yrs pointed out, this interest rate world is completely artificial. It's not normal in the slightest, but i guess that there are whole groups of buyers who have never seen anything much different.

I don't think it so much affects NYC now. People who are already in line (we're in contract, for instance) will just switch from fixeds to adjustables, so the problem will be punted forward 5-7 years.

However, IMHO -- the rate climb will shut the nascent national housing recovery (sales volume finally crept up for the first time in April) if it continues. There you have buyers for whom the $8K first-timer housing credit makes a big difference, and the effective 10% rise in costs is going to kibosh those deals.

ali r.
{downtown broker}