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Rising Interest Rates are Good News for Everyone

June 17, 2009

Rising interest rates can affect both buyers and sellers.  Although you wouldn’t think it, rising interest rates can be good news for everyone in Tangipahoa Parish.

Rising Interest Rates – Good News For Sellers

    * When mortgage interest rates rise, buyers get motivated to buy (Citigroup).
    * When buyers get motivated to buy, home values stabilize.
    * When home values stabilize, home prices increase with activity.

Rising Interest Rates  – Good News For Buyers

    * When interest rates rise, buyers hear the wake up call: Now is the time to buy to get the most house for the money.  Higher interest rates affect buying power.
    * When interest rates rise, buyers hear the wake-up call: Now is the time to buy to avoid a higher mortgage payment later.  Higher interest rates increase the required mortgage payment for the same loan amount.
    * When interest rates rise, buyers hear the wake-up call: Now is the time to buy so that qualifying for a loan will be easier.  Higher interest rates affect income ratios.

Rising Interest Rates – Good News For Everyone

    * Rising interest rates are an indication that the credit crisis is easing (Times.com).
    * Rising interest rates are an indication that better economic times are ahead.
    * Rising interest rates are an indication that the recession is easy and things are improving (Economic Cycle Research Institute).

Rising interest rates never make consumers happy.  But after all the gloomy recent economic news, maybe it’s time to accentuate the positive.  Corporate America and the banks are faring better, as indicated by the improvement of the yield curve between Treasury Bills and Bonds.  This curve is what causes interest rates to rise and fall.  If rising interest rates are an indication that our economy is improving, then it is good news for everyone.

Yvonne Martin, The Martin Team, your Hammond real estate specialists

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