Locked Out: Homebuyers Fight Skyrocketing Prices and Surging Mortgage Rates
In recent years, the US real estate market has seen an unprecedented surge in prices and surging mortgage rates, leaving many prospective homebuyers feeling as though they’re locked out of the market. With an already tight housing supply and increasing demand, the combination of higher prices and higher interest rates is proving to be a strong financial deterrent for many of those hoping to step into homeownership.
Jannet Smith, a veteran real estate agent in Miami, Florida has seen first hand the effects of the tightening market on her clients. “I’ve been in the business for over thirty years, and I’ve never seen anything like this before,” says Smith. “The prices are outrageous, and I’ve seen people have to pass on homes they might have otherwise been able to afford just a couple years ago.”
The issue doesn’t stop at prices. Mortgage rates, which remain near historic lows, have recently hit their highest levels since 2020, adding to the burden of prospective homebuyers. While still incredibly low compared with previous decades, the mere fact that borrowing costs have increased in recent weeks has been enough to impact the decisions of those trying to get into the market.
Many fear even higher costs on the horizon, a worry that is only worsened by the fact that the supply crunch seems to be entrenched, with no end in sight. For now, many homebuyers are left stuck in the situation, without much hope for relief anytime soon.
For those trying to get into the market, there are some potential solutions. According to Smith, “The best advice I can give is to try to save up as much as you can for a down payment. The more you can put down, the lower your monthly payments will be, and the easier it will be to qualify for a loan.”
Likewise, Smith suggests that, if possible, buyers consider saving up for a longer-term mortgage. While this may mean a higher down payment, it could potentially result in a lower interest rate and more manageable payment.
For many, however, the only real option is to wait out the market. With no shortage of potential buyers and a shortage of available homes, the conflict inflates prices and drives up borrowing costs, leaving many prospective buyers feeling as though they’ve been locked out. But in a market where things can and do change quickly, it’s important to remain hopeful and to be patient as the market stabilizes.