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Some mortgage rates climb towards 7%

Nolensville home
Posted at 5:34 PM, Jun 16, 2022
and last updated 2022-06-16 20:01:57-04

NOLENSVILLE, Tenn. (WTVF)  — Surging mortgage rates can be intimidating, but they might help stabilize the market long-term.

Accurate Mortgage Group’s Heino Moeller hosts Heino's Home Show.

"Unfortunately, with housing prices going up at the same time, it’s kind of the perfect storm of rates going up, prices going up," Moeller said. "It’s kind of bad."

Moeller said that a lot of homeowners refinanced during the pandemic due to low interest rates. Some even locked in a 30-year fixed rate of under 3%.

"And so, they’re kind of shocked to figure out that it’s not that — and double in some cases, depending on what you qualify for," said Moeller.

In the 80s, there was a time when mortgage rates jumped to 16%, so according to Moeller, it could be worse.

Depending on the financial situation, he said there are options.

"To give you an example, if you were looking at a $410,000, $415,000 home — now it’s probably about a $350,000 home to maintain the same payment."

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Realtor Sara Gooch is listing a home in Nolensville. At the same time, she's been busy talking to buyers about mortgage rates.

"There’s short-term options and long-term options, that this isn’t as hard hit as it feels — it does feel heavy — and a lot of people have had the call of, 'What are we going to do?'" Gooch said. "We’re just having to shift, change our position.”

She said prospective home buyers can look in different parts of town too.

"With prices still expected to go up at least 8% this year, and property values — we’re still on the rise of value," Gooch said, "So, it will cost someone more to buy at the end of the year versus now."

Gooch believes the rate increase will end up helping local buyers because it will stabilize the market.

"Buyers have not had a chance to get in with the elevated prices," Gooch said, "20% plus increase in pricing values in a year is not sustainable."

In addition, homeowners can always refinance later when the rate drops.