High mortgage rates pricing some hopeful homeowners out of the Bay Area
DALY CITY -- Prospective Bay Area home buyers are in a tough spot as mortgage rates hit a two-decade high, leaving some prospective home buyers re-evaluating their dreams.
Margarita Pabón is a single mother living in Daly City. She talked to CBS News Bay Area about the concerns she's facing in her quest to own a home.
"My big dream is to buy a house, but unfortunately, opportunities are becoming increasingly limited," Pabón said.
Having lived in her Daly City apartment for nearly 17 years since relocating from Nicaragua, Pabón's desire is to purchase a home in the same neighborhood where her son attends school. However, surging mortgage rates have made this dream nearly unattainable. The rates hit an astounding 8% this week, a figure not seen since 2000.
Margarita's realtor, Maria Jandres, describes the current situation as a nightmare for first-time homebuyers.
"In 2021, the record low-interest rate was 2.65%. But now the rates have increased to 7.9%, which is incredibly high," said Jandres.
With the market becoming increasingly complicated and mortgage rates soaring, Pabón and Jandres are working together to navigate these challenges on a modest income. Jandres encourages clients to explore creative solutions.
"I'm working hard to empower them and tell them that maybe they can also work as a family, gather their incomes together, and create a budget they can afford," Jandres added.
Putting the situation into perspective, Jandres explained that a buyer purchasing a $400,000 home with a 20% down payment would face a monthly payment nearly $1,000 higher than it would have been just two years ago.
However, in the Bay Area, the cheapest homes are priced at least $900,000. Consequently, Pabón -- along with her son and their loyal dog Toby -- continues to reside in their current apartment, holding onto a fading dream.
"Every day, the dream becomes more impossible to achieve," she said, echoing a sentiment held by many Bay Area residents.