Are Mortgage Rates a Big Deal?

Economists and some home section columnists make a big deal about mortgage interest rates. Some are fascinated by every little blip that makes rates jump and wobble.

Mortgage rates are hugely important for some families, especially first time owners, when even a small increase can shove that dream beyond their reach.

But for most Americans, though, the impact isn't so dire or direct. Doug Duncan, chief economist for the Mortgage Bankers Association, added context while recently attending a real estate writers' conference in Charlotte:

• 34% of American homeowners owe no debt. They own their homes free and clear.
• Between 48-50% have fixed-rate mortgages. They're not hammered by rising rates, either.
• Do the math, and you'll see that 82-84% of owners are insulated from the direct impact of rising mortgage interest rates.

In the final tally, Duncan said, "Only 7-10% of people are sensitive to interest rates.

Duncan expects appreciation on homes to average 6-7% nationally, down a bit from recent highs.

Source: Planet Realtor 5/8/06