Boca Raton, Fla. In the year 2013, it's not often that the 1980's are a direct point of economic reference, but that’s just what happened after the Fed signaled a change in June. Suddenly a year that made deadlines or things like Oliver North, Debbie Gibson, The Cosby Show and sex scandals involving Jim Bakker and Gary Hart was given a renewed purpose.

The year was 1987. The reason, our mortgage Interest rates just matched the biggest one-week increase since the presidency of Ronald Reagan. Here and now, potential home buyers and hopeful home sellers had to stop and take notice. When the rate for a 30-year fixed mortgage rate jumped from 3.39 percent to 4.46 percent in just a week, it signaled a change. In the ever evolving real estate market, it’s the newest thing to consider. Boca Raton based real estate agent Kristin Stampini said, “It’s going to affect the market.” It’s a bottom line issue. A spike in interest rates will ultimately affect the amount you pay for your home. The 4.46-percent jump also signaled the highest rate since July of 2011. According to Freddie Mac it was the first time that rate had passed 4 percent since March of 2012.“It’s getting buyers off the fence,” said Mark Wilkinson, a senior mortgage loan officer with Group One Mortgage in Boca Raton. He says the upward trend will make it a little more difficult to qualify and once again “more people are looking at ARMS now that rates have hiked.”At a June 19th news conference Federal Reserve Chairman Ben Bernanke said, “The fundamentals look a little better to us. In particular, the housing sector, which has been a drag on growth since the crisis, is now, obviously,a support to growth. It’s not only creating construction jobs, but as house prices rise, increased household wealth supports consumption spending, consumer sentiment. State and local governments, who have been a major drag, are now coming to a position where they no longer have to lay off large numbers of workers. Generally speaking, financial conditions are improving.”Bernanke even went so far as to say that if interest rates increase “for the right reasons” it is a “good thing.” Since mortgage rates are mostly determined by mortgage-backed securities (MBS) prices, the added demand for MBS had been a major factor in the decline in mortgage rates to historically low levels. Bernanke provided the clearest signal yet that the extra demand from the Fed will soon shrink.For the nationwide housing market, the new rates are a product of its own recovery. In Palm Beach County the median home price was up to $255,000, a 29 percent increase from a year earlier. In Broward that median price was the same, up 23 percent from the previous year. Inventory has been low for months in South Florida, and many of the buyers have been stepping up with cash. “We will see inventory return,” said Stampini. “The rates won’t impact cash investors directly, but other investors will feel it.” Traditional buyers seeking a mortgage will feel it most. Although they may be nervous right now, Stampini predicts that with some consistency, those buyers will feel more comfortable. She said, “Buyers will be okay once they see some stability.”Wilkinson suggests that any buyer in a pending deal should lock it in. He says, “The market is too volatile and rates are more likely to rise than fall.”Before the record jump, a home buyer purchasing a home at $255,000 and putting 20-percent down would have a monthly payment of about $903 per month at 3.39 percent. After the one week interest rate increase, that same monthly payment would go up to about $1028 per month at 4.46 percent.The surge in mortgage interest rates this week to their highest level in two years puts further financial burden on homebuyers in a highly competitive market. According to Stampini, “People are nervous. It will slow sales a bit.”