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Mortgage Rates Continue to Rise

And according to the latest data from the National Realtors Association, existing home sales are down year over year and this week, the 30 year mortgage rates hit their highest level since the year 2000. It's making owning a home much more difficult news. Senior reporter Michelle Castillo is here to break down the data. Michelle, why are we seeing so few families willing to part with their homes right now, we're experiencing a mix of low inventory and high interest rates, which is making it difficult for homeowners to buy their next place. So they're staying put in July, existing home sales were down 2.2% from June. And when you look at a year ago, it's actually down 16.6%. Typically the home owner has a mortgage rate right now of under 4%. And that's according to the National Realtors Association. So in order to buy a new place, they're going to end up with a higher rate. And as of Monday, as you pointed out, the average 30 year mortgage rate is 7.48%. On top of that, there isn't much new inventory. I spoke with Jessica Lotz the Nar Deputy chief economist and Vice President of Research. Here's how dire the situation is. We're short 5.5 million homes in the US right now. So even with new homes coming onto the marketplace, we really do need probably 2 to 3 years of very steady building to be able to meet the needs and it may not just be new build. We may also have to think about converting not only the office spaces but also converting hotels, motels, vacant malls, looking at other spaces that we can bring residential units into the market. On top of that, she's pointed out that the difference in price between an existing home and a new build is about $30,000 on average. That means those who combine new builds tend to have higher incomes making it harder for the middle class family. So how is this affecting people looking to buy their first home right now, Michelle? Well, new home buyers are probably the hardest hit doj owners in this homeowners right now are really in the driver's seat and that's according to any R LO. So an average home gets at least three offers right now and they're typically selling at about 35% above the listing price. She had more to say about new home owner struggles. They have to be able to save for a down payment in an environment where right rents have also been rising where student loan debt is coming back and they may have child care costs as well. And so it's very hard to save for that down payment in this environment where essentially you're saving and you're saving and you're saving and you're thinking you can afford that typical home. But yet home prices are also rising and interest rates are jumping. It makes it very hard to know where that target is added that the longer people rent, the more they lose housing equity and they could use that to buy their next place. Add to that the fact that rents are rising and those who are looking for their first home are really losing out. Not that much inventory at this time, not to mention high interest rates. What should people who want to buy a home do right now? What's their best option? Michelle? Well, there's a couple of things you can do at this time if you are looking to buy a new home. Lou said, and they are seeing a lot of people renovating their space right now kind of making do with what they have. I also spoke to a red fin agent who said there's a big demand for small bedrooms, finished basements and loft spaces. So think about those flex areas that can be used to work from home or a play area if you have multiple kids in a bedroom. So many people are finding ways to make those corners in their existing homes work as well. So they don't have to move to a larger spot. But the people who are in the best scenario right now are actually existing homeowners. Lou said, if it's possible, the best thing would be to sell your home and buy your next place in all cash. That way you don't have to deal with the higher mortgage rates. And it might sound like a rare scenario, but she said it actually is increasing about a quarter of home buyers right now. They're opting to forego the bank and they're placing that cash offer pretty amazing all cash. Thanks Michelle.