Tue. Sep 26th, 2023
    Homebuyers Struggle as Mortgage Rates Hit 20-Year Highs

    The rising mortgage interest rates are causing difficulties for homebuyers, with rates now at their highest level in more than 20 years. This is having a significant impact on the real estate market in the Sacramento region. Buyers are finding that they have less purchasing power compared to previous years due to the higher interest rates.

    Realtor and CEO of Best Sac Homes Group, Suneet Agarwal, explains that there have been around 7,000 fewer new listings between January and July this year compared to the previous year. This decrease is further exacerbated by the fact that last week, interest for a 30-year mortgage rose above 7.3%, reaching levels not seen since 2001.

    Real estate analyst, Ryan Lundquist, highlights the huge increase in the median price of homes in Sacramento. In 2001, the median price was just under $200,000, but it has now soared to around $590,000. The continuing rise in interest rates has taken many real estate professionals by surprise, as rate predictions for this year were wildly inaccurate.

    Agents and mortgage brokers are now having difficult conversations with clients, as rising rates mean that some people may be priced out of the market until rates come back down. The impact of higher rates can also be seen in the decrease in for sale signs and open houses, as homeowners are no longer motivated to sell.

    To navigate this challenging market, experts advise homebuyers to be realistic about their budgets and make offers that they feel comfortable with. Real estate professionals also note that approximately 40% of home sellers are making concessions on price to accommodate repairs, rate buydowns, and closing costs.

    In conclusion, rising mortgage interest rates are creating barriers for homebuyers in the Sacramento region, impacting their purchasing power and leading to fewer available listings. It is crucial for buyers to be realistic about their budgets and make informed offers, and for sellers to consider concessions to attract buyers in this challenging market.

    – SACRAMENTO Business Journal