High interest rates cooling off once red-hot housing market
MIAMI – Housing hit a peak during the pandemic and sellers saw their home prices soar. But now the market is dropping because of high interest rates.
Patrick Kennedy recently moved into a new home, and it's a long time coming.
He started looking at houses a year ago when the market was red hot.
"Everything that's nice and that's attractive to the majority of buyers, you would see them on the market and gone; under contract a day later, under contract two days later," he said.
Kennedy's realtor David Gunther says things have changed since then.
"The interest rates maybe are pulling buyers back a little bit," Gunther explained. "It's also affording buyers that are strong to not compete with the rest of the world."
Mortgage rates are now at 6.49%. That's down from 7% last month, but more than double from one year ago.
"There's not as many buyers," said realtor Melanie Hyer. "These higher interest rates are having buyers sit on the sidelines, saying, 'We'll wait and see.'"
Hyer worked with would-be buyer Celia Polhemus.
She wants a new home, but the thought of a high payment has her waiting.
At the current rate, a monthly mortgage payment on a $400,000 loan would cost about $800 more than a year ago, according to Zillow.
"We are just waiting you know," Polhemus said. "We're just waiting to see what happens with this market."
Kennedy got his loan when interest rates were at a peak, but his plan is to eventually refinance.
"I think realistically, hopefully, within the next 12 to 24 months, high fours, low fives," he said.
But experts forecast mortgage rates could actually climb again in the coming months, then slowly tick down during the second half of the year.
The housing crisis is leaving many desperate for help. That's why CBS News Miami wants to share your stories to show the crisis you're in or how you navigated the system. We will highlight these issues and work to get answers and solutions. Send us an email at housing@cbs.com.
