The benchmark 30-year fixed-rate mortgage jumped 54 basis points this week to 6.74 percent, according to the Bankrate.com national survey of large lenders. The benchmark 5/1 adjustable-rate mortgage rose 40 basis points to 6.61 percent, and the benchmark 15-year fixed-rate mortgage rose 45 basis points to 6.4 percent. This shows the largest weekly rise in the Bankrate.com index since 1987.
What does that mean for Boston real estate? Well, buyers are already having trouble coming up with 15-20 percent down payments and higher interest rates mean higher monthly payments. Many buyers may have trouble finding their dream home in their new price range. Buyers will either realize that they may not get all their “must have’s” and simple move forward with a purchase, or they will decide to sit the fence and lease. If interest rates continue to increase, we will most likely see higher rents prices with the increased demand.