NEW ORLEANS -- The cost of getting a loan to buy a house jumped up Thursday. The rate is at a two-year high of 4.51 percent for a 30 year mortgage.
So what does that mean to the local housing market?
Compared to other cities, local real estate agents say the New Orleans market is as hot as the summer temperatures.
"This past year, I've sold several homes to people who are in their 50s, 60s, early 70s, who are coming here to retire. They love what New Orleans has to offer. They love the culture of New Orleans. They love the people here," said Margaret Maxwell, a licensed realtor in Louisiana with Keller Williams Realty New Orleans.
The demand is higher than the supply of homes for sale Uptown. Maxwell says homes priced right, in good condition, get multiple offers. Many are cash offers to out compete ones contingent on loan acceptance. She's even had open houses where big Hollywood movie stars drop in.
Mandeville is coming back and the Bywater, Faubourg Marigny and other areas are booming as well.
"Lakeview is popping. And I just had a small listing, a precious cottage in Lakeview, and had so many phone calls about that. It sold the first day and it actually went over the asking price," said Maxwell.
Real estate agents say the one place in this area that really hasn't come back, pricewise since Hurricane Katrina, is Slidell.
The historically low mortgage rates have been kept artificially low by the Federal Reserve's involvement in the economy, say loan experts. And now with the mortgage rate jumping around one and a half points since May, the free market will react.
"I feel that rising interest rates is going to cause for more people to put offers in as a knee-jerk reaction. And they may now need to because of the affordability factor. As rates increase, they may not be able to afford that house that they were looking at before," explained Patrick Holder, a senior loan officer with NOLA Lending Group, LLC. (NMLS #138793)
The rental market is just as tight here and with the new hospitals and young entrepreneurs coming, the market still looks good.
"For the sale market, between the University, the medical school LSUHSC, and the VA hospital coming in, we have young people moving in. We have the tech companies have moved in. The game development companies, they've moved in town. And these people are loving New Orleans. And you know, once they get bitten by the bug, they want to stay. They don't want to leave," said Maxwell.
Loan experts say you should get pre-approved by a local lender before looking for a house and get locked in to a rate when you are under contract.