After a robust month for the local real estate market in June, the war in Iran and other geopolitical concerns are putting the squeeze on would-be homebuyers.
Rising oil prices have driven mortgage interest rates to their highest levels in nearly a year, pushing up borrowing costs, and the latest data from the Mortgage Bankers Association shows the number of mortgage applications plunging over the past few weeks.
Minnesota Realtors President Wendy Uzelac says in addition to higher principal and interest payments, there are other factors not working in buyer's favor right now.
"Insurance costs have been on the rise as well, so that's also factoring into this whole picture of what is really a buyer's total cost," Uzelac explains.
Rates for a 30-year fixed mortgage are hovering in the mid-to-upper 6% range. Uzelac says most lenders are willing to work with buyers in good standing, however.
She says realtors are focusing on connecting their buyers with lenders who can help minimize the hit of higher interest rates through different avenues. But many times, it comes down to simple math.
"Counseling the buyers and maximizing the buyers' potential choices for loan types and interest rates," she adds.
As for the market overall, Uzelac says it's becoming a bit more balanced in terms of the number of sellers versus the number of interested buyers.
After a robust month for the real estate market in June, interest rates have jumped while applications have plunged
After a robust month for the real estate market in June, interest rates have jumped while applications have plunged
