Home Business Spike in current mortgage rates unlikely to derail housing market

Spike in current mortgage rates unlikely to derail housing market

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Home prices are likely to continue higher at an above-trend price barring a surge in mortgage rates. 

U.S. home prices increased 13% annually in March, according to the national Case-Shiller index, making for the biggest gain in more than 15 years

Surging prices were the result of demand, which came as the COVID-19 pandemic sped up the flight from big cities to regional hubs and the suburbs, overwhelming already tight supplies. Record low mortgage rates allowed homebuyers to chase prices higher. 

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“Materially changing demand will probably take [mortgage] rates closer to 5%,” said Mark Fleming, chief economist at First American Financial Corp.

Mortgage rates typically track the 10-year yield, which during the…

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