Since rates jumped about a full percentage point from early this year, some buyers may not be able to afford as much house as they once had hoped.
Brandon Baar and his family put a down payment on a vacant lot in Crockery
Township's Hathaway Lakes last month, but they may have to redraw their dreams for building a home there.
The final purchase is also contingent on the Baars selling their Grand Rapids home.
The building site, with frontage on a small lake, is only about a mile from Brandon Baar's work as human resources manager at Hortech Inc. A bike path runs through the Hathaway Lakes community and behind Hortech.
“I could ride my bike to work and save about $500 a month in gas,” Baar said.
But the wait to sell continues. The Baars hope the recent mortgage interest rate hike doesn't dampen the enthusiasm of potential buyers who ultimately will form the bridge to their dream home.
Baar said he will lock-in an interest rate after his Grand Rapids home sells. But with each rate uptick, he sees some of his family's wish list slipping away for their dream home.
“It automatically affects the financial figures,” he said. “It might mean not building exactly what we want. We may have to hold off on cabinets, or a finished basement or underground sprinkling. We may have to take away some of those items that are more of a want than a necessity.”
The Baars' agreement is structured so they don't need to obtain a construction loan, but instead will obtain a mortgage when the home is built.
“It's not out of reach right now, but it definitely helps and is a plus if rates go down,” Baar said.