August 16, 2022

Highest Mortgage Rates Since 2008 Housing Crisis Cool Sales

Larisa Kiryukhin and her family were long ago priced out of the San Francisco Bay Area, where they had lived for decades. Ms. Kiryukhin, 44, is a medical assistant who was tied to her hospital, but the pandemic gave her husband, who works in information technology, the flexibility to move to a more affordable city. So Ms. Kiryukhin switched jobs, and this year the couple and their two children moved to Tampa, Fla., in hopes of buying a home.

In April, the family went into contract on a $425,000 house and was quoted an interest rate of 4 percent. Then the closing date was extended because the seller wanted time to find a new home. Then interest rates jumped, adding about $700 to the monthly payment, and the family backed out.

“I moved here just to buy a house, and here we go: The prices got so high we can’t afford it,” Ms. Kiryukhin said.

The typical home buyer makes about $70,000 a year, according to Moody’s Analytics. A $600-a-month increase in housing costs — about how much rising interest rates have added to the typical mortgage payment — is more than most people can shoulder.

Steve Silbar, a real estate agent in Spokane, Wash., said he had seen a sharp deterioration in interest among buyers looking for homes under $500,000. Those buyers typically have less cash, so rising mortgage rates “have moved them out of the market,” he said.

Article source: https://www.nytimes.com/2022/06/29/business/economy/mortgage-rates-housing-market.html

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