(WHTM) — After big runups in home prices the past three years, a lot of potential home buyers were hoping for lower mortgage rates or lower prices. So far they are not seeing either one.
Home prices reached another all-time high nationwide this spring, according to the latest Case-Shiller Home Price Index. It shows prices up 6.5% year to year with prices rising in all 20 major markets it surveyed.
Like so many home buyers right now, Casey Crowley has been frustrated.
“Very frustrating,” Crowley said. “Really couldn’t find anything that I was willing to pay more than what they were asking.”
Worse, these higher prices come at the same time mortgage rates remain stuck around 7%. The experts had been predicting lower mortgage rates this year, but that really hasn’t happened.
That one-two punch is frustrating many buyers. Realtor Susan Huff says they were hoping prices would ease this year due to high rates.
“Buyers are figuring out that if they wait, they thought when rates went up last year that prices would come down,” Huff said. “That has not happened at all. Prices have continued to go up.”
CNN says the combination of high prices and high mortgage rates have the housing market locked by a “Golden handcuff.”
Current owners don’t want to move because they bought their homes at much lower prices and are paying much lower interest rates. So buyers are debating whether to wait another year for lower rates but realtors warn that could mean the return of bidding wars, and even higher prices.
“When rates do drop,” Huff said. “You’ll see an influx of people are going to try to outbid each other, prices are going to escalate even higher.”
Many realtors expect mortgage rates to drop later this year as the fed stops raising interest rates. But you can buy now and refi when that happens so you don’t waste your money.
