LYNCHBURG, Va. (WFXR) — In another record-breaking hit to the wallet this week, 30-year fixed-rate mortgages have now reached their highest level in more than 21 years, meaning homeownership is more expensive than it’s been since 2001.
The high rates have already taken a toll on the housing market. Realtor, Karl Miller, with Karl Miller Realty based in Lynchburg, says a lot of what the market is facing comes down to supply and demand. He says while demand is still high, people are hesitating to sell their current homes for fear that rates will be even higher on their new homes.
“What I’m seeing in the marketplace right now is that sellers are almost more in love with their rate or their payment than they are with their home. So, this is causing a little bit of a bottleneck in the market because some sellers are unwilling to let go of that interest rate,” said Miller.
Miller says right now, the average house in the Lynchburg area is only on the market for about 10 days before it is bought compared to 2020 when the average was 65 days.
He says with so few houses being put on the market, those who are looking to buy, even with higher rates, are acting fast.
Current house hunter, Crystal Dillon, says she couldn’t agree more.
“Basically, as soon as something hits the market, it’s gone. So, if you’re not the first person there, there’s no chance that you’re getting it,” said Dillon.
Dillon says her family has even looked into building a home instead of buying, but says the cost to build has skyrocketed.
“Something we could have built for $300,000, two years ago, you’re now looking at five or six hundred thousand, it’s ridiculous,” said Dillon.
For those who are choosing to wait until rates drop to buy, Miller says it could still end up costing buyers more than they might think due to a spike in competition.
“There’s some buyer saying ‘I’m gonna wait, I’m gonna wait til they drop’ well it’s a good idea but guess what it’s a good idea for 20 or 40 other buyers, so it’s going to become very intense when the rates drop,” said Miller.
He adds that rent prices have also been increasing, and will likely continue to do so; however, he says he is optimistic that rates will drop within the next year.
There are a lot of moving pieces to the housing market right now, and both Miller and Dillon recommend that anyone who is buying or selling to lean on experts for help.