The pandemic saw a spike in housing prices but it also provided very low mortgage rates this allowed lots of Americans the ability to refinance their current rates. Recently mortgage have been climbing back up and spiked making it harder for people to afford a home.

“The jump in rates has hurt housing activity this summer — dissuading homeowners from listing, keeping the inventory of homes for sale alarmingly low, and worsening purchasing conditions for buyers” says Yahoo Finance.

This rate increasing has severely slowed the housing market, people who own homes with low interest rates don’t want to move because then they would have to forfeit their low rate. New buyer are also struggling to break into the market.

According to Gabriella Cruz-Martinez, personal finance writer, “Just 45.6% of new and existing homes sold between January and the end of March were affordable to families earning an income of $96,300”

This means that the majority of housing sales are to large real estate investors who intend to rent. As the rates reach 7% this trend will only continue.

As a financial advisor it is important to inform clients so save and be mindful of these rates. A fluctuation of even a tenth of a percentage has massive implications over the course of a 30-year fixed mortgage. While being a homebuyer is not always an option for everyone it is often the largest financial decision a person will make in their lifetime.