Dan Grossman
Federal Reserve decides not to increase interest rates
The cost of borrowing has not been this high in decades, but the Federal Reserve says high interest rates help lower inflation.
LEARN MOREPosted: 6:50 a.m. EST Nov 9, 2023
You go online, you look at a home, you find that perfect place and start dreaming of how it'll be the best new start for you and your family to create memories. Bliss.
But then you look at the price. Ouch. And then you think of the mortgage rate — double ouch — and suddenly that picturesque future that spells fairytale comes tumbling back down to Earth. You shut your computer and go to sleep defeated.
It's where Keith Singer found himself over the course of the last year and a half. And he would've given up looking for a new home altogether, he says, had it not been for the prodding of his daughter to keep at it
"We were getting frustrated," said Singer. "My wife and I were like 'Yeah sure, we're not going to find anything, it's not going to be that great' and then when we walked into it it was like 'Wow this is really, really nice.' My daughter was super ecstatic. We were very surprised in having to move forward with all of the processes of buying a home. We didn't expect to do that this last weekend."
This past weekend they put an offer in on a home in Denver that was accepted — a pleasant surprise for Singer considering the general sentiment of the market right now. According to Freddie Mac, rates dipped for the first time in weeks last Thursday. The week before that? Rates were the highest they had been since this time all the way back in 2000. Kelly Moye of the Colorado Association of Realtors says it's added to a general unease that has permeated the entire housing market from buyers to sellers.
"I've never seen it be like this, and I started in 1990. A lot of people need to move, want to move. They got a new job, they had a third kid, they need some space, whatever the case might be. But they're holding onto this incredibly low interest rate, you know, the 2.875% they were able to get three years ago, and taking on an 8% interest rate, it just seems like they can't do it and it seems overwhelming — or maybe even totally unaffordable," said Moye.
The hesitancy on the side of sellers adds to an already painfully low inventory of homes on the market. Realtor.com's latest data shows inventory dropped for the fifth straight month in September, with the available home supply down a stunning 45% from before the pandemic.
It makes Singer that much happier he was able to get in on a home this past weekend.
"The interest rates were high but there were seller concessions — something we didn't know existed. So there were a lot of expenses that we had anticipated paying for that we didn't have to, which made this more attractive in the end," said Singer.
