Homebuyers nationwide are feeling the impacts of rising interest rates as U.S. mortgage applications fell to an almost three-decade low this month.
Thirty-year fixed mortgage rates have hit their highest level in more than two decades as the average rate approaches 8% this month, well above the pre-pandemic average of 3.9%, according to Freddie Mac.
Some of the most expensive housing markets in the U.S. include San Diego, Denver, Miami and New York City, according to Redfin, but there are ways around the price increases along with the dip in buyer demand in the winter.
Despite the high mortgage rates, Danielle Hale, chief economist at Realtor.com, explained it could still be a good time to buy.
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“It’s worth talking to your lender, and seeing what, if any, adjustments you can make to your lender and seeing what, if any, adjustments you can make to your credit score, or your financial situation, or even the type of loan that you are taking on,” Hale said.
Jeff Tucker, a senior economist at Zillow, said sellers can be more flexible with buyers during winter.
“In fact the sellers, who are still on the market at this moment, a lot of them are getting worried about whether their listing will sell before the holiday season. What that means is that a lot of them might be willing to meet buyers halfway,” he said.
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Joy McVicker, who is moving to Denver from Washington state, said it has been a very different shopping experience from when she bought her first home in 2020.
“A house would come up, and then the offer review date would be like two days later, so you would have to get in quickly, put in your offer quickly because the interest rates were so low,” she said.
McVicker’s goal is to find a home by the end of 2023.
Mortgage interest rates are not expected to ease up at any point for the remainder of this year, analysts said.
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