Mortgage applications hit 28-year low; Triangle still 'hot'

DeJuan Hoggard Image
Tuesday, March 7, 2023
Fluid housing market changing weekly
Despite rising interest rates, a real estate expert suggests that if buyers have the funds to purchase a home now, they should.

RALEIGH, N.C. (WTVD) -- If you ask real estate broker Marshall Rich of Rich Realty Group, the current real estate market is unique.

"I haven't seen anything just like this setup like this where the interest rates are rising up," said Rich as he stood in front of his Raleigh office. "(The market is) week by week. I'm hoping that the rate will come back down a little bit and we'll see another boost."

According to Freddie Mac, the current 30-year fixed rate mortgage is 6.65%, the highest it's been since November. Rich remembers 2004 when a time like this was more familiar.

"It was 2004, there was another six-month little pullback. But right after that, it really went straight up right until the '08 crash in the fall, which really didn't hit Raleigh until the spring of '09."

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The current rise in interest rates can be attributed to the Federal Reserve raising rates. Additionally, Rich said he believes rates "loosely follow" the 10-year Treasury note.

Real estate experts will have you believe that the stall in progress -- as mortgage applications are the lowest they've been in 28 years according to the Mortgage Bankers Association -- is because many buyers cannot afford and do not want a high-interest rate. Additionally, many sellers have much lower interest rates and don't find it attractive to sell their homes and have a higher mortgage with interest rates where they currently are.

"The reality is the majority of people who have a mortgage right now it's around 3%. Possibly less," said Rich. "What that means if people are going to be less likely to sell the house and lose that mortgage because who wants to give up a 2.9% rate if they're going to have to take on a six, high 6.8% rate."

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He suggests if buyers have the funds to purchase a home now, they should.

"It's always a great day to buy real estate," he said. "Mortgage rates may go higher between now and the end of the year. And so what I would tell you is you're better off buying today. Not only for the time opportunity gain that you get of making a transaction now, but the ability to refinance the rate two years from now and you should have achieved an equity gain."