Last week we posted an article that the Federal Reserve Bank’s action to stop their $85 billion dollars bond purchasing program could slow down the Real Estate bubble in Silicon Valley!  And it did not take that long for the

Federal Reserve Bank in San Francisco, Califor...

Federal Reserve Bank in San Francisco, California, United States. (Photo credit: Wikipedia)

evidence to show up this week where some buyers have decided to put their purchase plans on hold.   Now the big hurt could come when the Fed actually stops the purchase plan which could crash the housing rebound.  

The average 30 year fix mortgage rate jumped 2 weeks ago to the highest levels in the past 2 years to an average of 4.46%!!   This recent rise of mortgage rates was because they track the yield on the 10-year Treasury note which typically track the long term interest rates.    Some economists were predicting that in the Short Term, the impact on the housing market would be minimal and that the rise in Mortgage Rates would only cap the rise of home prices.   But typical any government interference in FREE Market the move appears to have had un-intended consequences by terrifying some buyers out of the market.  

In fact, some economist were anticipating that  some buyer who were on the fence about buying in the next 3 months, might decide to move quicker in fear of rising interest.  
According the Pete Carey of Mercury News siting interviews with buyers who have decided to put their Real Estate purchase plans on hold for 1-2 years to avoid over-paying for home and face the repeat of another market crash.

Let us know how you think the rise of interest rate will impact your housing plans?

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