Mortgage rates above 7%

November 07, 1993|By Lorraine Mirabella | Lorraine Mirabella,Staff Writer

It didn't last long.

Three months ago, rates on 30-year fixed mortgages dropped below 7 percent for the first time in a quarter-century. Last week, they spiked back up.

Some in the real estate industry said increased rates -- still considered low enough to attract homebuyers -- should have little effect on the housing market. But others said the rise above 7 percent likely would push fence-sitters to refinance or buy a house, especially first-time buyers.

They also disagreed on whether rates had hit bottom.

"I would say it's a blip, not a long-term situation," said Richard J. Roszel, associate broker with Hill & Co. Realtors. "I don't think it will have any dramatic effect. It's not appreciably higher."

But for the lower-priced market, he added, "I think there will be a bit of a rush, or stepped up interest in buying houses."

Keith T. Gumbinger of HSH Associates of Butler, N.J., said that if the recent good economic news continues, rates will climb.

"This is not good news by any means, but it's not the end of the world," Mr. Gumbinger said. "It could stanch off growth in the housing market. . . . But if it made sense to refinance and buy a house before, it probably still does."

The Federal Home Loan Mortgage Corp. reported Thursday that the average rate for 30-year fixed mortgages rose to 7.11 percent, up a quarter-point from 6.86 percent the week before.

In the Baltimore area, the average rate rose to 7.07 percent from 6.89, according to HSH Associates.

At Columbia Bank, nervous customers began phoning in a panic, seeking advice on locking in rates, mostly for refinancings and construction loans, said Ed Dinardo, mortgage director.

"They feel this is it, this is the bottom. They lose sight of how low they actually are," Mr. Dinardo said.

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