In 2013, mortgage rates rose from 3.5 to 4.5 percent because the Federal Reserve pulled back its mortgage-backed securities purchase program. This year, rates have risen due to economic growth.
John Burns Real Estate Consulting broke down the differences in the context behind the rate hikes in 2013 and today. Four years ago, unemployment rates were higher, consumer confidence was lower, and oil prices were more expensive.
While new home sales fell 8 percent in 2013, housing demand is more resilient today. New home sales have improved 14 percent year-over-year through February, and several markets such as Dallas, Seattle, and Nashville can be considered “hot.”