Though the associated paperwork and language can be complicated, the math of the mortgage rate is relatively simple: higher rates equal higher payments. When it comes to a 30-year fixed mortgage, the current rate sits around 3.95% (at the time of this writing), hitting a slightly lower rate than the previous months (which resided in the 4's), but we expect these rates to rise again as we move into 2016.

We've written about the effects of waiting to buy in Illinois, but these leaps will have a national effect on how much potential buyers can spend and, in turn, will decide the quality of home they purchase:

The Wall Street Journal reports that these rising mortgage rates are "like pouring cold water" on overheated markets. The WSJ continues: 

At current mortgage rates, homes in all top 30 metro areas are either undervalued or fairly valued at current prices, according to John Burns, chief executive of John Burns Real Estate Consulting Inc. Mr. Burns defines fairly valued as in line with historical norms for mortgage payments compared with incomes. If rates rise to 6%, homes in more than half of those markets, including Los Angeles, San Francisco, Miami and Denver, would be overvalued.

"Overvalued" might sound beneficial at first, but Forbes suggests otherwise and writes, "When home prices grow faster than the rest of the local economy, housing is becoming overvalued." This is not a sustainable model and results in an imbalanced economy. 

This means that potential buyers should enter the market now, while mortgage rates are relatively low and house payments are a more economical choice than rental payments. When you take into account the still-low rates and the rising costs of renting, now is the right time to buy. Chicago's home values are predicated to increase 3.4% over the next year, and this will also increase home prices. 

If you're a potential homebuyer and want to take advantage of mortgage rates before they continue growing, drop the Real Group Team a line!