{"id":70337,"date":"2023-10-08T21:05:33","date_gmt":"2023-10-09T01:05:33","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/mortgage-rates-are-rising-fast-these-buyers-still-want-a-house\/"},"modified":"2023-10-08T21:05:37","modified_gmt":"2023-10-09T01:05:37","slug":"mortgage-rates-are-rising-fast-these-buyers-still-want-a-house","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=70337","title":{"rendered":"Mortgage Rates Are Rising Fast. These Buyers Still Want a House."},"content":{"rendered":"
\n

Higher mortgage rates are likely to drive home sales back to a 13-year low as more buyers put their searches on hold\u2014but they aren\u2019t scaring everybody away.<\/p>\n

Among the buyers still in the market: those relocating from more expensive places or taking advantage of less competition.\u00a0<\/p>\n

\n

Housing market metrics this year have set record after record\u2014and not in a good way. Mortgage rates, at a recent 7.49%, have risen to their highest levels since 2000, while the median existing-home price in August was less than $7,000 short of its record high last June. <\/p>\n

Higher costs have stretched would-be buyers\u2019 wallets: The median-priced home in the third quarter would cost the average worker 35% of his or her wages, according to an Attom Data affordability study released last month. That\u2019s the greatest share since 2007, right before the housing bust.<\/p>\n

The fourth quarter is shaping up to be even worse. The 10-year Treasury yield, with which mortgage rates usually move, climbed to its highest level since 2007 last week. There was a 0.18 percentage point jump in
\n Freddie Mac\u2019s<\/span>
\n weekly measure of mortgage rates.\u00a0<\/p>\n

Higher mortgage rates are the most immediate ways most buyers feel the impact of climbing bond yields. It costs more to finance a home purchase, and fewer homes go on the market as homeowners with low mortgage rates opt to remain in place.\u00a0<\/p>\n

Recent rate increases should push down existing-home sales in the coming months. Economists expect that previously owned homes in September sold at a seasonally adjusted annual rate of 3.88 million, according to FactSet consensus estimates. Such a reading would be the lowest since October 2010, when the country was still climbing out of a financial crisis ignited by the housing market.<\/p>\n

Just the same, some buyers remain on the hunt for a home. Agents who spoke with Barron\u2019s<\/em> say many are relocating from higher-priced areas in search of relatively affordable markets.\u00a0<\/p>\n

Southern Florida, despite big price increases in recent years, remains a hot spot for those relocating from even pricier markets up north, says Anthony Askowitz, a broker with Re\/Max All Keys Real Estate in the Miami area. \u201cOur pricing is not so bad compared to the Northeast,\u201d he says.<\/p>\n

A record share of house hunters between June and August were l<\/strong>ooking to relocate, according to a Redfin evaluation of views to and from 100 metropolitan areas.<\/p>\n

Some f<\/strong>oreign buyers also are also undaunted by U.S. home prices, says Los Angeles-based Sotheby\u2019s agent\u00a0<\/strong>Elizabeth Daly. Home prices in Los Angeles are up about 42% since March 2020, Case-Shiller data show\u2014but real estate there still looks affordable to buyers relocating from places like Tokyo and London, she says.<\/p>\n

Buyers don\u2019t always cross state or international borders in search of a deal. Framingham, Mass., sees its fair share of buyers seeking more space at better prices relative to Boston, which lies about 40 minutes east, says ERA Real Estate associate broker Nelson Zide. \u201cPeople don\u2019t mind going further out now as much as they did before the pandemic,\u201d Zide says.<\/p>\n

Buyers relocating from a more expensive area often can pay cash, and avoid a mortgage altogether. \u201cCash is like a cheat code right now,\u201d says Daryl Fairweather,
\n Redfin
\n \u2018s chief economist. \u201cYou don\u2019t have to deal with these high interest rates, and you don\u2019t have to compete with all the people who do rely on mortgages to finance the purchase of their home.\u201d<\/p>\n

Another group of borrowers still in the market: those beat out by competition when rates were much lower. Higher rates have made financing a home purchase more expensive\u2014but the share of mortgage applicants using Federal Housing Administration, or FHA, loans has been gaining in recent weeks. FHA loan applications accounted for 14.5% of total applications during the final week in September, according to the Mortgage Bankers Association.\u00a0<\/p>\n

FHA loans allow borrowers to put down as little as 3.5%. These loans can allow buyers without enough savings for a larger down payment to get a foothold in the housing market. \u201cFHA borrowers are more in it now because they had such a hard time when rates were low because of all the competition,\u201d Redfin\u2019s Fairweather says. She added that sellers may be more inclined to accept an offer with a low down payment now that they have fewer options.\u00a0<\/p>\n

Finally, some buyers are driven by lifestyle changes that can lead to a home purchase in any kind of housing market. Yes, mortgage rates are higher, says Butch Wahlsmith, a Columbus, Ohio, area Redfin agent\u2014but that doesn\u2019t mean much to buyers who need more room for their family or are relocating for a job. \u201cThere are all these new people coming in that never knew about the lower rates,\u201d he says.<\/p>\n

Write to Shaina Mishkin at shaina.mishkin@dowjones.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Higher mortgage rates are likely to drive home sales back to a 13-year low as more buyers put their searches on hold\u2014but they aren\u2019t scaring everybody away. Among the buyers still in the market: those relocating from more expensive places or taking advantage of less competition.\u00a0 Housing market metrics this year have set record after […]<\/p>\n","protected":false},"author":1,"featured_media":70338,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-70337","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nMortgage Rates Are Rising Fast. 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