Over the course of the year, mortgage rates hovered mostly in the mid- to low-3 percent range, giving consumers historically strong affordability for several months, even as home prices rose. But in recent weeks, real estate professionals – as well as buyers and sellers – have likely noticed mortgage rates spiking to 4 percent and beyond. There’s now concern among all those groups that this trend will continue for some time to come, and potentially reduce the number of real estate sales to start the new year.

The winter months are slow enough as it is for many agents, without the potential concern people may have when they see rates have risen nearly a full percentage point in a month and a half, according to CNBC. Already this seems to have reduced some sales numbers because people may not think they’ll be able to afford the higher rates. That might be particularly true among first-time buyers who don’t have a lot of experience dealing with the housing market.

What’s the perception?
To be fair to concerned consumers, rates have risen quickly and sharply, disrupting nearly a full year of rates being below 4 percent, the report said. In the past, even minor rate hikes have led to some reduction in mortgage activity nationwide – more often for refinances than purchases – but many industry insiders attributed that to the fact that so many people got accustomed to rates being near historical lows. That same issue may be true both now and in the near future.

“It’s kind of sad because you’re helping out a first-time buyer who is in need of these low rates and doesn’t have the personal liquidity to offset if the rates rise,” one lender in New York City told CNBC. “One is on the bubble, but one is almost a dead deal.”

What’s the reality?
However, it’s worth noting that the difference in actual monthly costs for a mortgage with even a 4.2 percent rate versus one in the 3.5 percent range isn’t actually that much money, according to the National Association of Realtors. Of course, that money adds up over the course of a year – and certainly across the life of a loan – but these higher rates don’t instantly make a mortgage unaffordable.

Moreover, if consumers are worried about paying more due to high rates, they should keep in mind that neither rates nor prices are likely to return to the levels seen in early 2016 any time soon. Both are more likely to keep rising than to retreat, and as a result the most affordable time to buy a home is “as soon as possible.”

Working with an agent throughout the sales process can go a long way for would-be buyers, particularly those who want to own for the first time. Experienced real estate pros can carefully explain the issues related to affordability that are likely to crop up over the next several months and beyond.

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