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Heritage Bankshares Inc. Message Board

  • maine1964 maine1964 Feb 24, 2013 9:18 AM Flag

    Lets Talk Interest Rates, the Economy, and Rising Home Values

    Sure, interest rates are slightly ticking up (REFIs will slow down a bit) but the U.S. economy is far from being out of the woods yet. Rates will not skyrocket anytime soon.

    What if the economy turns the corner and interest rates climb even more?...The result will be rising home prices, which we're already starting to see....Guess what will happen with a better economy and rising home prices?:
    1) 25 percent of borrowers are currently still "underwater", meaning they haven't been able to do a REFI. When property values rise guess what the folks that are no longer underwater are going to do??
    2) When home prices rise, borrowers normally tap the equity through a home equity loan or line of credit to pay for other purchases.

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