For the first time this decade, home loan interest rates are steadily moving upward in 2018 and are forecast to continue. If that sounds like tougher times for house hunters ahead, listen closer. Some economists believe rising mortgage costs will give buyers an edge in property negotiations after a long stretch in which sellers were sitting pretty.

The reason: more homes are winding up for sale across the country as owners seek windfalls from climbing list prices, while the rate of property sales declines as shoppers can't afford them.

"Currently, resale listings are rising while the pace of home sales is falling," says Rick Palacios Jr., senior vice president and director of research with California-based John Burns Real Estate Consulting.

Home supplies bottomed out last December at 3.2 months, meaning that's how long properties would be on the market before they're all sold given no new houses go up for sale. The national supply pushed up to 4.3 months as of August —  the most recent national figure.

According to Palacios, "nationally we’ve already entered the early stages of a buyer’s market" if researchers are right about the supply trends. "Should supply levels cross above five months we’ll be watching for flat, possibly declining resale prices in some markets, especially where affordability is already very stretched," he says.

He cites figures showing that climbing interest rates aren't as critical as surging home prices, since they mostly impact shoppers gearing up to buy a house while millions of people who already own properties are locked into fixed rates. "The mortgage payment is what matters, not just the interest rate," Palacios says. "Home prices have risen to be so high that many markets of the country already have a huge affordability problem at a (still historically low) 4.7 percent mortgage rate," he says.

The researcher singled out mortgage rates and homes on the market to address because, he says, "We still hear two housing industry rules of thumb that make us cringe: 5 percent is still a great mortgage rate (and) anything less than six months of supply is healthy." Instead, home loan rates area already worrying prospective buyers in the mid to high 4 percent range, and four months supply seems like the break even point on a buyer versus seller market, he says.

WalletHub personal finance website offered a similar view in the recent release of its 2018 real estate markets report, noting that "home values (are) rising by an average of more than $16,000 in the first quarter of 2018 but affordability (is) dropping as mortgage rates get higher."

Deborah Kearns, mortgage reporter for, wrote recently that mortgage rates jumped in 2018 and are poised to rise above 5 percent by next year. Home prices are expected to continue to increase.

According to's historical figures, the highest average 30-year fixed mortgage rate in 2018 was 4.8 percent in late May and the lowest this year was 4.1 percent in early January, she notes.

Kearns says higher home loan rates can result in mortgages costing several hundreds to thousands of dollars more.

Predictions on 30-year fixed mortgages, she says, show a rise, including:

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  • The Mortgage Bankers Association foresees a lift to 4.8 percent by the end of the year.
  • Freddie Mac mortgage finance provider says the 4.6 percent average this year will hit 5.1 percent in 2019.
  • says the rate will average 4.6 percent and reach 5 percent by year-end.

"Concern that higher tariffs would dampen economic growth helped keep rates from climbing throughout the summer, but as the economy continues to prove resilient, mortgage rates are expected to continue their upward march," Danielle Hale, chief economist with, told

Len Kiefer, deputy chief economist for Freddie Mac, agrees that mortgage rates will increase through the fall, winter and into next year.

The 30-year mortgage rate, he says, follows Treasury bills and bonds, notably the 10-year Treasury note. They're being pushed higher as the strong economy fuels inflation and as the Federal Reserve raises short-term interest rates, which tends to boost long-term rates, too.

With a strong economic and jobs picture on the horizon, the Federal Reserve has signaled it plans to keep raising rates gradually — and the market is factoring that into current rates, Kiefer says in the article.

The projections are proving prescient: the 30-year fixed-rate mortgage averaged 4.94 percent in the Nov. 8 week, up from 4.83 percent, Freddie Mac said Thursday. That's the highest for the popular loan product since February, 2011, according to MarketWatch.