TODAY

TODAY   |  July 02, 2013

What rising mortgage rates mean for you

Mortgage rates have risen more than a half a point in a week to the highest level in two years. So what does this mean if you’re in the market to buy or sell? CNBC real estate correspondent Diana Olick and realtor Mike Aubrey of HGTV’s “Power Broker” have the scoop.

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This content comes from Closed Captioning that was broadcast along with this program.

>>> have you been sitting on your home waiting for prices to rise before you put it up to sale? or you want to buy before mortgage rates get too high?

>> the housing market is slowly bouncing back. what does that mean for you? here with advice is the real estate correspondence and mike from "power broker." we have been hearing a lot about mortgage rates and how they're starting to inch back up. let's talk about what that means to the average home buyer who owns a house for $208,000.

>> it's hard to imagine here in manhattan but that's the median home price . mortgage rates spiked up nearly a full percentage point. if you're putting down for a $208,000 house, you put down 20%, it's $166,000. it's gone to $841. if we continue to see them rise you can see a 15 to 18% jump in your monthly payment. for a lot of folks it's not doable.

>> it's about 4.5% higher now but historically it's a low number.

>> absolutely. if you start looking at where things have been, you mentioned natalie the fact that there are interest rates around 18% in the 80s. having said that, i think if you look at the american home buying public right now, the fact that rates have gone up 1%, they're scared.

>> so let's talk about how much more this could go up. how much are you hearing rates will keep climbing and what effect do you think it will have on the market because it seems like housing is starting to bounce back.

>> it came at the worst time. we're seeing home prices spike. it's a rising cocktail. they're not going to go that much higher. they will be between 4.5 and 5%. it depends on what the fed does in buying mortgages which it has been doing which has kept rates so low. we have very short memories though. these are still historically low rates and there's a lot of products you can buy. you can get a lower rate if you go to an adjustable rate mortgage . they went from being a three letter word to four letter word. it's a good product if you're only in your home about 5 to 10 years.

>> buyers are getting more nervous as they see the rates go up. should they be really though as they look at the market? is it a good time to get in if you want to buy?

>> most of america has not in terms of pricing and afford blt. affordability. most of california, obviously prices are through the roof right now but real estate has always been a great investment. there's no doubt about it. if you want to buy a house, how are you not buy now.

>> you have a test about the subtle things when it comes to seal ing the deal for the seller.

>> i'll show you before and after photos and see what you think in terms of how it would look great for a seller to show it and not look great.

>> talking about staging and all of that.

>> so i think the first picture you'll see is of a bathroom and that bathroom. does that look good or not.

>> i would lose the towel immediately. i don't want to see your dirty towel.

>> i'm thinking the photo hanging there and the wallpaper above.

>> and now goes your half picture. that person left the exact same sink there but they changed out the mirror, they changed out the light fixture is made you more sellable and contemporary than the first picture.

>> you won that round.

>> do we have another one?

>> absolutely. our next picture is a kitchen. i want to know if the kitchen looks good to you or not.

>> i think it looks very clean. i'd take the clutter off the counters but otherwise clean and maybe the art work on the walls.

>> you must not like these people's art.

>> i like that it kind of goes with the color.

>> that picture is a staged kitchen that's already been done. i'm trying to get you to say yeah. this is something that's nice. i don't have the before picture for you but this is something that looks contemporary. when you talk about what sells houses, walls and floors, kitchens and baths.

>> all right. well, with this guys we're out of time but so much to talk about when it comes to real estate . you can see new episode of the "power