The Federal Reserve’s repeated bump in interest rates — designed to calm inflation worries — may be chilling the years-long red-hot residential real estate market for some home buyers, especially locally. NPR’s Mary Louise Kelly reported the trend from the perspective of a Lansdale house-hunting couple.
In just the past few days, the Fed hiked interest rates again; this latest three-quarters-of-a-percent jump is its fourth for 2022.
Its actions have translated to higher rates in the housing market. The average rate on a 30-year fixed mortgage, NPR reported, is now around 5.5 percent, double what it was a year ago.
As a result, many hopeful house buyers are finding themselves priced out of the residential real estate market altogether.
Mackenzie and John Bathgate, of Lansdale, are two of them.
“At this point, we’ve seen 28 homes in person [and] ultimately made seven different offers, each one a little bit more aggressive than the last, just because we got so tired of it,” Mackenzie said. “It’s supposed to be exciting, and it’s been the opposite.”
The Bathgates have waived inspections, bid tens of thousands of dollars above asking prices, and still have come up zero.
And the longer they play the game, the higher interest rates seem to spiral. Their tactic now? Cease the hunt at present and wait for the tide to turn from favoring sellers to being more friendly to purchasers.
More on interest rates and their effect on new house buyers is at NPR.
