The Federal Reserve is expected to start raising interest rates later this week, and anyone who's ever bought a house — or thought about it — knows that if mortgage rates rise by much that will make it tougher to afford a home.
Homebuilders are watching the interest rate decision closely too. That's because this 100-year flood of a housing crash has been especially tough on them.
De Desharnais, a homebuilder in Nashua, N.H., says she's one of the lucky ones — her company survived the crash. But it didn't come without pain.
"We had 32 employees on our payroll at normal times; we have 6 on our payroll right now," she says.
The housing market definitely has improved in the past few years, but Desharnais says homebuilders like her can't help but be a bit nervous about the prospect of the Fed raising interest rates.
"People are out there finally buying," she says. "So builders like us that have been around a long time, we have big subdivisions that we've been carrying through that recession. I think there is a big concern if the interest rates go up, that everything's going to come to a screeching halt."
But Desharnais says most homebuilders don't think that will happen. That's because the Fed has been signaling that interest rates will only start rising very slowly, and mortgage lenders already have begun baking that increase into today's mortgage rates.
Desharnais, who also is a licensed real estate agent, says she hasn't seen any rush by homebuyers to purchase before rates go up.
"People aren't out there going, 'Jeez, we gotta go do something, because the rates are going to increase,' " she says. "There's no sense of that within the real estate community at all."
Some economists, though, think people who want to buy a house should have a greater sense of urgency.
John Burns, who runs a national real estate consulting firm, says mortgage rates are expected to rise about 1 percentage point over the next several years. That would mean the same-priced house will cost you 12 percent more in monthly payments.
"So if mortgage rates go from 4 [percent] to 5 [percent], payments are going to go up 12 percent; that will hit affordability hard," he says. "And I don't think that message has really gotten out there to people — that they understand they should take advantage of where rates are today."
And Burns says it's once again become easier than many people think to qualify for a mortgage, despite caution on home loans by some of the biggest banks.
"There's a lot of non-banks, like Quicken Loans and loanDepot, that are taking a lot of market share from the banks," he says. "As long as you can provide the income, and you're not, say, below a 660 FICO score — which is about a bottom 30 percent of the country — they can get you a mortgage relatively affordably."
Looking ahead to next year, one big question will be whether first-time homebuyers finally will return to the market. William Wheaton, a housing economist at MIT, says millennials just aren't settling down and buying houses like past generations — partly because fewer are getting married.
He says that in recent decades, the proportion of households between the ages of 20 and 35 who never had been married was about 30 percent. In the 2010 census it was twice that — 62 percent.
"That's just an enormous change," Wheaton says. "These people are not getting married. I don't know why — that's a really interesting question."
Wheaton says it's one question that has big implications for the future of the housing market.