Mortgage rates hit 7-percent for 30-year fixed rates
Andre Warren's newest listing in Sherman Oaks hit the market this week, just as mortgage rates hit a high that hasn't been seen in more than two decades.
With mortgage rates nearly doubling since the start of the year, the long-term cost for buying a house is now more difficult than its been in recent years.
The most popular loan, the 30-year fixed rate, is now at an average rate of 7.16, the highest it's been since 2001. That's the fastest mortgage rates have grown on record and experts believe that rate will likely increase in the next month.
"I'm seeing on the buyer end, their buying power has diminished, but they're not facing as much competition either," Warren said.
U.S. home sales fell 35-percent year over year over the past 4 years, but in Southern California, home prices are still rising in some areas and are stabilizing in others.
Overall though, experts don't foresee to see prices rise from where they currently are.
"I do not anticipate housing prices dropping too quickly to too rapidly from where it is now, but I also don't see it going up in the near future," Abraham Park, Pepperdine University Associate Professor of Real Estate Finance, said to Lazar. "So high house prices with high mortgage rates make this completely unaffordable for most Californians at the moment."
Previously, the housing market was a sellers market. Now, it is undoubtedly a buyers market.
"I am seeing sellers willing to work with buyers and buyers who aren't having to compete against 15 other offers, half of which are all cash and the other half have no contingencies," Warren said.
Even though experts don't see the rates coming down anytime soon, realtors tell me they're still seeing clients lock in near 6-percent mortgage rates. The key is to shop around to multiple lenders and be willing to try unconventional options.