EAST BRUNSWICK, N.J. (7/30/15)--The mindset of today’s mortgage buyer has changed, and when long-term rates increase, homeowners with locked-in low rates may not consider a move to a bigger home, said Mike Schenk, CUNA vice president of economics and statistics.
He was quoted prominently in a CTW Features syndicated article in the East Brunswich (N.J.) Sentinel (July 30).
“Of course, nobody really knows that exact path forward,” he said about today’s low, single-digit mortgage rates. “But when long rates do begin to rise, those that have locked in low, long-term fixed-rate mortgages definitely will think twice before moving,” he told the publication. (See related News Now article: Fed still holds off on rate increase.)
The article was about changes in mortgage buyers. Because mortgage rates in the single digits may not be seen again for decades, many buyers will regard their new home as a place to stay for the long haul, it said. The National Association of Realtors said that 25% of buyers indicated they intended to stay in their home at least 16 years. That’s up from 5% who said so in a similar survey in 2006.
It predicted that consumers’ addiction to low rates will curb future refinancings at higher rates, both for mortgages and home equity lines of credit. Buyers are looking more at what needs the home will accommodate over the years, and are considering prudent homes that are good candidates for future expansion.