Browsing through online real estate listings in Brooklyn, Molly Schwartz realized her $500,000 budget wasn’t giving her a lot of options.
“Unless you have a ton of money to spend, there’s not a lot out there,” Schwartz said.
Home prices are high, and interest rates are getting higher. New home sales fell by 5.5 percent last month, according to numbers from the Commerce Department. Last week, sales of existing homes dropped to their lowest level in three years.
And those trends aren’t exclusive to New York, by any means. For one, economists say the inventory of housing is low. That pushes up prices and boosts the competition for houses as buyers snap them up off the market.
Allison Ray is looking to buy a house in Duluth, Minnesota. Her realtor’s been sending her updates twice a week, and Ray feels how competitive the market is.
“Everything we’ve liked thus far, maybe with the exception of one or two houses, is off the list within a couple of days,” Ray said.
Ray is also trying to sell her current home in Connecticut. She’s worried that rising interest rates are pricing potential buyers out of the market.
Floridian Jon Castro has been watching interest rates rise since last year. Back in February, he decided it was time to make a down payment on a new home that hadn’t been built yet.
“I’m like man, we better do something and lock it in,” Castro said. “I didn’t know we’d have to get a closing date to lock it in.”
But he still can’t close on the house to lock in a mortgage rate because construction isn’t finished. And he’s nervously watching as interest rates rise even more.