Fed raises Rates?

[hinestro]

Hi,

What are the forums thoughts about the recent interest rate increase. 30 yr. mortgage is now at 6%. Still very low but what impact does everyone think it might have? Do you think it might actually inrease real estate prices because everyone is making a mad rush at getting low rates before they get any higher?

Hinestro

[Las Vegas Real Estate]

It might. I wish I had a crystal ball. I think it will slow the appreciation down a bit. If the average price of homes is high and the the rates are higher it wil probably make it harder for joe blow to own.  But who knows. If people make a mad dash to buy the inventory will decrease and the prices will raise.  

[wricg]

Unforunetly this will affect the middle class (lower income) or properties you were going to flip, now may need to be turned to a long term residual with a renter. RE has a steady and strong tract record. I keep hearing everyone screaming the sky is falling, so folks may start to dump properties which hepls positions those with the capital to buy them up and hold out for the next push in the RE market. This is how the rich get richer, staying the course it will all pay off in the end...

[niravmd]

interest rates are definitely going higher in the next 12months.[as hinted by greenspan]

last time interest rates went higher 98-99, didnt stop house prices in CA from appreciating.
but this state had not already inflated 100%.
i think what will happen is that places that have already exploded like CA, NV, AZ and FL
will stagnate as people will no longer by investment property that doesnt cashflow even
with 30% down. since the pool of first time homebuyers that can afford these inflated
prices at higher interest rates will decrease proportionally to the increase in interest rates,
houses will sit longer on the market and might even drop.
however places that are undervalued and at the bottom of their cycles, will see a strong growth even with higher interest rates. especially since investors who have made money
in places like CA, AZ & FL will pull money out of those places and invest in the undervalued
cities.