Interest rates are at a 15-year high, which means home loans are going to cost more than they did several months ago.
Some are worried that it’s a sign the market is headed for a crash. However, experts said that’s not necessarily the case.
Experts said people shouldn’t be scared to buy a home, because the market is not in the same place it was back in 2008.
“A lot of people are worried about the crash of the market and back in ‘8, ‘9 and ’10. That was a crazy time,” Jessica Scott, Broker Associate with KW Advantage, said.
She said back in 2008, there were a lot more homes on the market because of foreclosures and new construction. That meant buyers were able to make offers well below the asking price.
In the past year, construction has slowed down, which means there are fewer homes for sale compared to ’08 right before the crash.
“The prices were sky rocketing because we didn’t have enough inventory and then you have the sellers were making tons of money on their property, but the buyers were really overspending,” Scott said.
All of this uncertainty with inflation and interest rates has people worried about what’s going to happen next.
“A lot of the concern is, ‘How much over do we have to pay?’ This balancing of the market is actually beneficial for the buyer, because they aren’t overpaying for houses any more,” Scott said.
Michael Stokes with Cityscape Home Mortgage said the good news is that banks are finding creative ways to help people afford homes even with the interest rates at 6.5 percent.
“We have a 2-1 buy down. So, what that is is basically, it’s a way to reduce the buyers mortgage payment for the first two years and it’s a significant difference,” Stokes said.
Stokes said the first thing people