The leap in mortgage rates this week — the highest level in two years — is pushing potential buyers off the fence and might prompt a rush of home purchases in a market where potential homeowners still struggle to find something to buy.
Mortgage rates have abruptly climbed from near-record lows in recent weeks, rising a full point over the past month.
The average rate on the 30-year fixed-rate mortgage hit 4.46 percent this week, up from 3.93 percent last week and the biggest one-week jump in 26 years.
While mortgage rates are still low by historic standards, potential buyers may move to lock them in now before they go up again, experts say.
Those cheaper mortgages have helped boost home sales and prices in Sarasota, Manatee and Charlotte counties, aiding the housing recovery that began last year.
With prices already rising from tight supply and fierce competition — especially from well-funded institutional investors like the Blackstone Group that are snapping up foreclosures — some worry that higher rates will cause some buyers to rush their purchases or make panic offers.
“These are still historically low rates, but we are creeping up to 5 percent, which is the benchmark in everybody’s mind, and people want to rush to buy a property before we get up there,” said Joe Adamaitis, president of the Gulf Coast Mortgage Bankers Association. “People were climbing over each other to get 4.5 percent just a couple years ago.”
Buyers who rely on financing already are at a disadvantage with today’s housing conditions. Adding increased borrowing rates into the mix will continue to tilt the market in favor of sellers, Adamaitis said.