Owning a home has long been part of the American dream. But for many prospective buyers, that dream is becoming harder to reach.
The average 30-year fixed mortgage rate is now around 7%, and higher borrowing costs are affecting homebuyers nationwide.
According to the Mortgage Bankers Association, mortgage applications have dropped 19% nationwide compared with a year ago.
But Tiffanie Bailey-Romey, president of the Pocono Mountains Association of Realtors, says she isn’t seeing the same decline in the local market. Instead, she’s seeing more hesitation among buyers.
“I think people have a lot of anxieties when it comes to a lot of things that are happening,” Bailey-Romey said.
“We’re looking at the fact that food has gone up, insurance has gone up, interest rates have gone up,” she added.
The buyers feeling the most pressure, she says, are those shopping in the $250,000 to $400,000 range.
For those buyers, higher interest rates can leave less wiggle room for other rising expenses.
But mortgage rates aren’t just affecting buyers. They’re also contributing to inventory.
“A lot of sellers don’t want to leave what they already have,” said Bailey-Romey. “I’ve already have that as an interest rate, I’m not trying to move.”
There is one potential benefit to higher rates: they are helping to keep home prices from rising as quickly as they have in past years.
Bailey-Romey says buyers should consider the long-term picture when deciding whether to purchase a home now.
Her advice: “Marry the house, date the rate.”
“So, you can still purchase a home now, and then when the rates change, you could think about what a refinance will be,” Bailey-Romey said.