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Mortgage rates hit highest level in over 20 years
Regina Gonzalez reports
SARASOTA, Fla. - Buying that perfect home seems further out of reach for many budget-conscious buyers in the Tampa Bay area as mortgage rates hit a 22-year-high.
Brittany Clark has the felt the burden during her own search in Sarasota.
"I live and work there, and am living with friends right now just to even pay a lower rent rate," Clark explained. "It's not even intimidating, it's more so depressing because its like, how is anybody managing to do this? I'm educated, I have a master's degree, I've done everything I'm supposed to do, and I'm still struggling to even try to buy."
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She's certainly not alone. Tampa Realtor Emma Tomlin, who serves as the finance officer at Tomlin St Cyr Real Estate services, said Clark is among a popular demographic of younger, first-time, would-be home buyers' in the Bay Area, shocked by what they're seeing.
The average rate on the popular 30-year fixed mortgage increased to 7.09% this week.
"It's definitely a shock for anybody who hasn't bought in the past 20 years or so," Tomlin said. "Coupled with increased home values...that's obviously going to be a really big difference in affecting their monthly payment."
Tomlin added that, because so many owners who snagged low rates years ago are choosing to stay in their homes, she anticipates the market will stay competitive.
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"Our median home price right now in Hillsborough in Pinellas County is $400,000," Tomlin said. "So the difference between a 4% interest rate and a 7% interest rate is, you know, several hundred dollars on your monthly payment. And so for a lot of people that can price them out of affordability, especially with all the extra expenses that come with owning a house."
But, she stresses that more inventory is popping up here and there, and a good bargain can still exist depending on where you're located and what you're looking for.
"For people that are coming into the market now, do the math. Do the math on what it would be for them individually. I suggest that they talk to a lender. Kind of figure out what different loan products are out there for them, what different down payment assistance programs are out there for them," Tomlin said.
Also, cash is king, if you have it.
"Now that you're at interest rates at 7%, if you have cash, it is definitely the option to go," Tomlin said. "It also gives you a little bit more flexibility on the insurance fronts, because you don't have a lender that's demanding that you have a certain amount of insurance coverage, whether it's your homeowner's insurance or an additional policy for flood, which most of Tampa is in a flood zone."