Bankrate’s senior financial analyst Greg McBride isn’t sweating the new environment in mortgage rates.  December’s FOMC decision to start the upward climb one baby step at a time won’t really mean much to home sales in the larger scheme of things and most homeowners who wanted to refinance have already done so.

McBride sees rates on a 30-year fixed ending the year at 4 to 4½ percent or so—not much higher than the current 3.89 percent but higher than in past years.

More importantly, rates will not rise enough to deter sales.  “Rather, buyers and sellers will make their decisions based on conditions in their personal lives, such as downsizing with the kids move out,” McBride said in an interview with Real Estate Economy Watch

As for refinancing, there has been a lot of opportunity in recent years and demand is exhausted, he said.  And don’t look for a revival of demand for adjustable rate mortgages. “Consumers are still squeamish following the subprime crash, he said.  The mortgage market in 2016 will be fixed rate and heavily weighted towards purchase over refi loans.