Tuesday
September 2, 2014

Wells Fargo: Don’t Fear Rising Rates

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Wells Fargo: Don’t Fear Rising Rates

The nation's largest mortgage lender isn't blinking an eye as mortgage rates rise and begin to make home buyers nervous.

“We don’t believe that the recent increases in mortgage rates are going to in any way, shape, or form snuff out the housing recovery,” Wells Fargo Chief Financial Officer Tim Sloan said at an investor conference in New York on Monday. “When you look at any sort of statistics in the demographics in terms of household creation as well as household affordability, they are still very attractive and should drive a continued recovery in the housing business.”

The interest rate on an average 30-year fixed-rate mortgage has increased more than 1.2 percentage points since May, when it hit a record low of 3.35 percent, according to Freddie Mac. Even as rates have risen, home prices have climbed, too. Home prices were up 7.7 percent in June year-over-year.

Source: “Wells Fargo Says Rate Rises Won’t Stall Housing Rebound,” Bloomberg (Sept. 9, 2013)

Read more:

Rising Interest Rates: Keep Calm and Prep On
Blunting the Effects of Rising Interest Rates