Homebuyers: High mortgage rates are stressing home sellers and buyers
PHILADELPHIA (CBS) -- Mortgage rates hit a 21-year high Friday at 7.09%, leaving home sellers and buyers with added pressures as they look for a new place to live.
"It's been really stressful," said Mary Tucker.
She recently moved to Philadelphia from Virginia Beach. She was in a short-term rental and looking for her new home.
"The thing that made this particular season of selling and buying stressful is the fluctuations of the rates within a week, within a couple of days, so you're rushing to make decisions," Tucker said.
She said that can cause a seller to lose money on a sale and spend more on a later purchase. She was working with Berkshire Hathaway Realtor Tabitha Heit, who is based in Montgomery County. Heit said stressed-out home buyers are in a great position if they have a home to sell first.
"People are still overbidding," Heit said. "They're still in the position to make a lot on their investment."
However, Heit admitted those sellers still face low inventory, high prices, and now even higher mortgage rates while they look for their new homes.
"It's still a great time to sell. They just have to find the right place to move to," she said.
Jake Kolen with Prosperity Home Mortgage said the key to saving money, even with historic mortgage rates, is to find a new home first.
"Then rates improve, we think the rates will improve at some point in the next few years," Kolen said. "If they do, we will help them with the refinance."
He said negotiating a 1% drop on an existing $300,000 home loan could mean up to $300 a month in savings.
"There are families where that can go to a lot of other things: groceries, other healthcare, things like that," Kolen said.
Tucker was trying to hold onto optimism Friday, especially for younger buyers paying high rents while saving for a big down payment to buy a home.
"We've got to give them some breaks we've got to let these rents come down a little bit," Tucker said. "Owners just have to do that."
Inflation is still high. Fed Chair Jerome Powell said interest rate hikes should bring down inflation.
However, that means mortgage rates could continue to rise for now.
