Rates are up, sales are fast. Why?

In the last few weeks, mortgage rates jumped about three-quarters of a point, to about 6.75 percent. This increases a mortgage by an extra $50 per month for every $100,000 borrowed. For most buyers out there, that is $200-300 per month for the next 30 years.

Given this news, I expected to see a little more caution exhibited in the marketplace this weekend. But nooooo.... at least in the immediate areas outside of Boston, buyers are still making quick decisions. This past Sunday, I saw eight places. Of those, none were really special. At one place, we were told that an offer was on the table, but the seller was waiting until after the open house to accept or reject it. At another, we were told that an offer was already accepted on one of the three units that were for sale.

Now don’t get me wrong, a fast decision is not always a bad decision. But I did not see either of these properties as special enough to provoke the response they received. I wonder if that buyer knows about the rate change, whether that buyer has done the math, whether that buyer is getting good advice.

My question to buyers is: What makes a place worth jumping on in this market?