TOLEDO, Ohio — Mortgage rates are over 6% for the first time in 14 years.
This comes as the Federal Reserve continues to hike interest rates to combat inflation.
And as the Fed continues to raise rates, mortgage rates and other loans are spiking upward as a side effect. Danberry Realtors Broker Owner Dan McQuillen said it's creating nothing but headaches for potential home buyers working on a fixed budget.
"They'll be looking at a house for, say, $200,000, when they were pre-approved for a mortgage at 3%," McQuillen said. "Well, mortgages have jumped up to 7%, so now all they can afford is $175,000. And if they couldn't find anything at $200,000, they're not finding anything at ($175,000)."
Low inventory is a contributing factor to this.
"What we really need is new construction, because that's going to help with the supply issue," McQuillen said. "Lumber is coming back down but materials are still expensive."
And after last year's hot seller's market, -- where there is low supply and high demand -- there are not a lot of existing homes up for sale either, with only two months of inventory in the entire northwest Ohio region, McQuillen said.
He said if buyers find a place that works for them, bite the bullet on the high mortgage rates and buy now.
"If we do get into a recession and rates come back down, you can always refinance back into that lower rate, so I wouldn't try to wait for the perfect timing," McQuillen said. "I would go get your home you want when you're ready for it."
McQuillen also said Danberry has sold 8% fewer homes than average this month, but prices have climbed 7% at the same time. He said this kind of market trend simply can't last.
But where will the market go from here? McQuillen said this is the most unpredictable he's ever seen the market, so it's difficult to guess.
"You study the market, you study what happened in '08, '09, you study trends and what's going on, and it's totally different," he said. "Nothing seems to make sense. When interest rates go up, prices usually go down, and that hasn't been the case."
However, with demand still outweighing supply, McQuillen said this is still a great time to be a seller. Anticipating more market unpredictability in the near future, he said now is the time to put a home on the market.