High interest rates make buying a home tough for prospective middle class buyers
As the Federal Reserve ratchets up interest rates, home prices refuse to fall, which is putting prospective middle class home buyers in a tight spot.
Stacey Schwartz, an agent with Coldwell Banker's Lage Team in Trumbull, says selling a home in this market is easy, but those looking to buy a home are on a longer road.
"I've had clients we've worked with for even up to five or six months before we found them what they wanted," Schwartz said.
Interest rates ticking up over 5% this month on average even as average home prices continue their two-year climb.
Steven Lage says that price is driven by supply and demand, with a six-month supply of homes preferred in the market. Earlier in the pandemic there was less than one month of supply.
"We've actually increased about 45% recently, so we're up to about 2 1/4 months of inventory. So not a normal market by any means, but we are starting to work towards that," said Lage.
As price increases finally slow, brokers say prices could start to fall. But they're not expecting a crash like in 2008.
Rates were over 10% through the 1980s and into the 1990s. Schwartz says once you do make that purchase - real estate is still a safe investment.