PHILADELPHIA (KYW Newsradio) — Mortgage rates hit 8% nationally, including in Philadelphia, for the first time since 2000. Still, the market is flooded with potential homebuyers.
"Mortgage rates are as high as they've been in almost 25 years... 8%,” said Mark Zandi, chief economist with Moody's Analytics. “House prices are about as high as they've been in history by orders of magnitude. And there's no inventory out there. There's, like, nothing to buy."
Federal Reserve Chair Jerome Powell says inflation is to blame for the rate hikes, and bringing it down will require a slower-growing economy and job market.
Realtor Marco Troche works with first-time home buyers in Philly. “Folks who purchase or refinanced a few years ago when the rates were at 3%...2%... they're kind of married to the rate in a sense they're not selling because if they sell they're obviously going to get stuck with the higher rate as well,” he explained.
Though people may be eager to buy, Zandi says it's best to wait for a better time to purchase a home, especially because “no one is buying” right now.
Existing home sales fell nationwide in September, the fourth straight month in a row, reaching rates as low as they were during the COVID-19 pandemic. Zandi says sales are down 15.5% from September 2022.
He adds there is no harm in looking, but recommends saving money and waiting until interest rates decline to make an offer.
Troche, meanwhile, says you should talk to your mortgage lender about ways to make your offer more appealing to sellers than a standard pre-qualification.
“If you can put yourself in a position where you're actually committed, meaning that the bank reviewed all of your documents and gave you conditional commitment,” he suggested, “that puts you ahead of the curve a bit.”