Potential home buyers have more time to bid as soaring interest rates are more out of the market, – NBC 7 San Diego
Homes are currently selling at the slowest pace since 2012 thanks to the recent spike in mortgage rates.
Experts say they expect rates to continue rising through the end of the year, but despite the high rates, some believe it’s actually a good time to buy a home.
“We’re not selling as many homes per month right now because interest rates have spooked some buyers out of the market,” said San Diego real estate agent Felicity Hunter.
New lending on a 30-year mortgage now averages nearly 7%, the highest in 20 years and nearly double what it was last year, according to Hunter.
“They went up quickly. I mean, this all started happening, I mean, I think back, maybe like June or July when we started seeing these increases. And then, with inflation, I guess they weren’t getting the response they wanted. So they kept going up. We’ve heard they could even be as high as 8%,” Hunter said.
High rates are also blamed for slowing construction
“I think builders are also affected by interest rates. So they don’t want to have a surplus on their hands either, because if they have to refinance those homes and keep them, those rates will kind of start to break through their margins,” she added.
Production is down 8.1% from a year ago, according to the US Census Bureau, contributing to limited supply.
“You know, every time we see inflation and rates go up like that, I think you’ll be a little scared of the sellers,” Hunter said.
Still, despite fewer homes and soaring interest rates, Hunter said it could be a good time to buy a home.
“Now we see our buyers, you know, getting their offers accepted, they don’t have to compete with 20 other people and cash offers,” she said.
And she predicts that interest will drop at the beginning of the year.
“You go out with the rate, but you marry the house. So you can refinance,” Hunter said.
According to Realtor.com, the average home price in San Diego was $899,000 in September, up nearly 13% from a year ago.