HARLINGEN, Texas (ValleyCentral) — Home sales across the country are on track to be the lowest since the mortgage crisis began several years ago. The National Real Estate Association said high-interest rates were dragging sales down. Mortgage experts said people were more hesitant to buy a home at the current rates.
Real estate experts said monthly mortgage payments could be several hundred dollars higher today than they were two years ago. Lenders said first-time home buyers were feeling the effects more. They said it was important to sit down with a mortgage broker to figure out their finances.
Heather Welch, Branch Manager with Texas Coastal Mortgage said, “Let them know what they can do to kind of offset the higher interest rates, as far as making changes in their budget. Possibly cutting back on credit card debt.” Welch said that despite the interest rate hikes, she saw a lot of younger clients.
Realtors said a lot has changed in the last two years. They said that in the middle of, and right after the pandemic, the housing market was booming.
Olga Munoz from the Munoz Real Estate Group, part of Keller Williams LRGV explained the situation. “Houses were selling the day it was listed. There were bidding wars. No open houses at all. Houses were just selling way too quick,” said Munoz. She said that’s not the reality today. She said the market had cooled, but hadn’t hit a slump.
Welch said the national trends may take a little longer to be felt in the area.
“The valley is a little different compared to other parts of the country. We do tend to feel things a little later on than other parts of the country,” she said.
Real estate agent Juan Munoz, also with the Munoz Real Estate Group, said changes in the market had caused sellers to change their behavior. He said prices are still higher than he normally saw in the RGV, but customers were adapting to the new reality of the real estate landscape. “Because interest rates are a little bit higher. Payments are a little bit higher. Now they have to offer a little bit more concessions, or they have to lower down the price a little bit,” he said.
When it came to re-financing, lenders said there was almost no market for that side of the business at this time. They said with rates higher than they had been, almost no one was in a position to refinance their home. She believed that trend wouldn’t last.
“If rates, and when rates do go down, we do anticipate a pretty large number of re-finances,” Welch said.
Borrowers were asking more questions and making sure they were comfortable with what their monthly payments would be. “It is always a good time to purchase real estate, regardless of the interest rate. Because you are still building equity for yourself versus a landlord,” Welch added.