Over the last few weeks we’ve seen mortgage rates rise radically. Wells Fargo raised interest rates on its 30-year fixed jumbo to 8% last week and pressure continues this week as fears of the ‘mortgage meltdown’ has spread to the financial markets. So, what do higher rates mean for the Marin housing market?
While there’s no denying that the cost of housing has gotten a bit pricier for now, higher interest rates probably won’t have much impact in Marin. Marin easily has the highest prices statewide and, as a result, atypical buying patterns. The big difference is that Marin households have much greater purchasing power and higher rates don’t mean all that much. With ample assets, down-payment dollars and income levels, the typical Marin buyer will make do.
Clearly, there is going to be some effect on the Marin housing market, but it will likely be minor compared with other counties. With so much uncertainty in the mortgage market, we’ll just have to wait and see. It will depend mostly on how long the credit crunch lasts.