High mortgage rates pricing some hopeful homeowners out of the Bay Area

Soaring mortgage rates price Bay Area homebuyers out of market

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.

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