Seth Wenig / AP
Mackenzie Bathgate and her husband, John, have been trying to buy a house in Lansdale, PA, for eight months now.
“At this point, we’ve looked at 28 houses individually, but ultimately made seven different proposals, each a little more aggressive than the last, because we’re so tired of it,” Bathgate said. “It’s supposed to be exciting and it’s been the opposite.”
Bathgate said they had waived the inspections and bid thousands of dollars above the asking price, and still haven’t had any luck.
Meanwhile, they are seeing interest rates spiral higher and higher – each increase adding to the pressure to find their home.
“That’s when we started feeling that kind of tension, ‘Oh my god, we need to make sure that every weekend is focused on looking at these three specific houses that we’re interested in,’ because We know they’re going to have an offer accepted by Monday.”
The couple are now exhausted and have decided to put their search to an end, just as the Federal Reserve raises interest rates again.
On Wednesday, the central bank hiked rates by three-fourth per cent. This is the fourth time it has happened this year – a pace the US has not seen since the 1980s.
The average rate on a 30-year term mortgage is now about 5.5%, nearly double what it was at the beginning of the year, According to Freddie Maco, Those high rates, combined with already high home prices, mean that buying a home has become a lot harder, even if the competition is a little less stiff.
“Nationally and locally we are seeing a cooling, a decrease in demand and an increase in supply,” said Ashley Jackson, a realtor with Realty Austin in Austin, TX. “We’re seeing this across the board, which is what you’d expect with interest rates going up so quickly.”
Jackson said the white-hot market for property had allowed sellers and agents to become accustomed to snagging properties within days, and was flooded with 20 or more offers for a listing, many at asking prices. .
,[Sellers] They might be a little disappointed if their house has been sitting on the market for 21 days, which is actually still good enough. So it’s just fiction,” said Jackson, who is also the 2022 president-elect for the Austin Board of Realtors.
But there is no end to the gloom for home buyers, who are battling against a competitive market and steady interest growth.
Sienna Connor currently rents an apartment in Iowa City with her husband, Rex, and their two children. Connors began considering buying a home in 2020, just before the pandemic, but the bank said they weren’t ready for it.
“We were told by a mortgage lender that our credit needed to be a little higher. It took us a few years to save up for the down payment and closing costs and what not,” said Sienna Connor.
Finally, this month, they were pre-approved at an interest rate of 5%. But that rate doesn’t lock in until they have an offer on the house accepted. And with all the time to save and increase their credit, Connor said they may have missed their window.
“A few years ago, we would probably have been able to buy a nice three bedroom house for our family. But once interest rates go up, we will effectively be out of this whole area,” she said.
Others, such as Peter Heuer and his wife, Cathy Yount, have been able to find opportunities within the growth. After a long search, they are finally in contract on a house in Rochester, New York.
“I think they [higher interest rates] In fact, helped us personally, because they greatly reduced the competition,” said Peter Heuer. “So the last one we submitted, the last one, which was successful, we had the property as a protest.” But there were only a few offers. By 10 or 20.”
Courtesy of Peter Heuer
Heuer said he is pleased with the stability and freedom that the homeowner will provide to him and his family. But for Bathgates in Pennsylvania, Connors in Iowa, and countless other Americans, those luxuries feel more out of reach than ever.
For Bathgate, it’s easy.
“We just want a house,” she said. “We just want to have a family and a yard and be able to have a beer on our deck at the end of the day. And it’s frustrating and I feel like the American dream is no longer being achieved.”
This story was adapted for the web by Manuela López Restrepo.