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Real Estate Losing its Steam |
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Mortgage lending rates on the escalating resulting in an increase in the number of unsold homes on the market. Existing home sales are declining leaving owners hanging.
The past two years has seen a drastic change in tides from the once heydays of real estate when owners could just as easily sell an overpriced 3-bedroom home as they qualify for an interest-only mortgage.
Now, the market is changing. Fast. The skyrocketing mortgage lending rates create a doom and gloom scenario not only for potential sellers but buyers as well. Both parties can't seem to decide whether to wait for the market to improve and buy/sell later or grab the opportunity to buy/sell now while the rates are still manageable.
But, according to Frank Nothaft, Freddie Mac's chief economist, U.S. sales of new and existing homes are expected to decrease by 8% this year as rising prices and higher mortgage rates are practically making homes inaccessible to more families.
Anthony Chan, chief economist at JPMorgan Chase & Co.'s private client services group in Columbus, Ohio says: "The housing market is clearly slowing down. Now that the mortgage rates are going up, you may see people getting really, really scared."
Marie Rose Arong
Real Estate Press
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