{"id":1979,"date":"2023-03-29T12:25:15","date_gmt":"2023-03-29T12:25:15","guid":{"rendered":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/2023\/03\/29\/love-your-mortgage-hate-your-house-inside-the-misery-of-the-housing-markets-new-catch-22\/"},"modified":"2023-03-29T12:25:15","modified_gmt":"2023-03-29T12:25:15","slug":"love-your-mortgage-hate-your-house-inside-the-misery-of-the-housing-markets-new-catch-22","status":"publish","type":"post","link":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/2023\/03\/29\/love-your-mortgage-hate-your-house-inside-the-misery-of-the-housing-markets-new-catch-22\/","title":{"rendered":"Love Your Mortgage, Hate Your House? Inside the Misery of the Housing Market\u2019s New Catch-22"},"content":{"rendered":"

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Photo-Illustration by Realtor.com; Source: Getty Images (2)<\/p>\n

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Christine Short<\/strong> and Steven Agemy<\/strong> love their brownstone apartment in Brooklyn, NY. But they might love their mortgage even more.<\/p>\n

When they purchased the two-bedroom duplex three years ago, in March 2020, the price was fair and the mortgage rate was great, a mere 3.25%. Today, however, the married couple have clearly outgrown their starter home\u2014and with a new baby girl joining their now 4-year-old boy, Short knows they\u2019ll need a bigger place soon.<\/p>\n

\u201cIt mostly works,\u201d she says. Yet many nights, she finds herself surfing real estate listings. And while she often sees homes with plenty of potential, there is one thing holding her back: If they moved, they\u2019d have to get a new mortgage at about double their original interest rate.<\/p>\n

\u201cWe\u2019re pinching ourselves for the rates we got,\u201d Short says. But they will eventually have to make a tough choice: Sacrifice their interest rate, or remain in a house that\u2019s no longer comfortable for their growing family.<\/p>\n

\u201cI can make this work for a few more years,\u201d Short says. \u201cSteven and I talk about this almost daily. And my two neighbors are both expecting children in the fall, so everyone is thinking about this.\u201d<\/p>\n

The housing market\u2019s top problem today<\/h2>\n

This couple\u2019s dilemma is so common, it\u2019s been dubbed the \u201chate my house, love my mortgage\u201d syndrome. According to the Urban Institute<\/a>, this widespread malady stems from historically low mortgage interest rates in the 3% range more than doubling over the past year, surging to multidecade highs<\/a>.<\/p>\n

This sudden spike has thrown a wrench in the normal cycle of people buying starter homes, then eventually trading up. Since this would involve getting a new mortgage at a much higher rate, many homeowners are instead staying put, even if their house is poorly suited to their current needs.<\/p>\n

\u201cThis is making the process of moving up in the current market very difficult,\u201d says Realtor.com\u00ae Chief Economist Danielle Hale<\/strong>. \u201cThese are tough choices. It\u2019s a hard time for homeowners to make plans.\u201d<\/p>\n

In fact, a recent report by Goldman Sachs found that 99% of borrowers have mortgage rates below 6%<\/a>. Of those, 28% snagged rates at or below 3%. Combined with rising home prices, the cost of buying a house today is a whopping 50% higher<\/a> than it was just a year earlier, Realtor.com data shows.<\/p>\n

\u201cThe payment shock for trying to borrow the same amount of money is pretty large,\u201d Hale says. \u201cAnd when you consider how much prices have risen, it\u2019s an added shock.\u201d<\/p>\n

\u201cThe biggest gap in the market right now is move-up buyers,\u201d says Drew Coleman<\/strong>, founder of Opt Real Estate in Portland, OR. \u201cThey\u2019re the ones that are log-jammed and don\u2019t want to give up the rates, which is creating a lack of inventory.\u201d<\/p>\n

Coleman reckons that of all the people who come to see him, only about one-third actually decide to sell their homes. He sometimes wishes people would take the opportunity to be contrarian\u2014to sell, then buy in the current market where there is probably less competition and prices are a bit off their peak. After all, they can always refinance later when rates go lower.<\/p>\n

\u201cWe never tell people to take a payment they can\u2019t afford,\u201d he notes. \u201cBut what we\u2019re saying is, you have an opportunity here.\u201d<\/p>\n

___<\/p>\n

Watch: How Much Does It Cost To Sell a Home? Here\u2019s a Reality Check<\/strong><\/p>\n

___<\/p>\n

\u2018It feels risky no matter what I do\u2019<\/h2>\n

For homeowners who want to move, facing higher housing payments seems particularly daunting when inflation is still raising the price of many things, leaving many feeling financially unsettled.<\/p>\n

\u201cA lot of my clients think, \u2018It really feels risky no matter what I do. It feels like there are no good solutions out there.\u2019 And I feel that,\u201d says Nikki Kam<\/strong>, a real estate agent with Flyhomes in Seattle. To help, she tries to distill the personal situation down to very specific priorities. Is a larger home, a better school district, or more green space worth this much more money?<\/p>\n

\u201cWith higher mortgage rates, their purchasing power is lower for the same monthly payment,\u201d she says. \u201cSo, in that price range, can we find something to their liking? Can they tolerate, say, a longer commute, or will they decide, \u2018we can wait\u2019?\u201d<\/p>\n

At the end of the day, it\u2019s important to note that in many ways, people with homes and the lowest mortgage rates in history have it really good. Short, for one, says she appreciates that hers is a \u201cfirst-world problem.\u201d<\/p>\n

\u201cWe\u2019re not dying here,\u201d she says. \u201cWe\u2019ll just have to get creative.\u201d<\/p>\n

The post Love Your Mortgage, Hate Your House? Inside the Misery of the Housing Market\u2019s New Catch-22<\/a> appeared first on Real Estate News & Insights | realtor.com\u00ae<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Photo-Illustration by Realtor.com; Source: Getty Images (2) Christine Short and Steven Agemy love their brownstone apartment in Brooklyn, NY. But they might love their mortgage even more. When they purchased the two-bedroom duplex three years ago, in March 2020, the price was fair and the mortgage rate was great, a mere 3.25%. Today, however, the…Read More→<\/a><\/p>\n","protected":false},"author":0,"featured_media":1980,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1979","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts\/1979","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/comments?post=1979"}],"version-history":[{"count":0,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts\/1979\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/media\/1980"}],"wp:attachment":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/media?parent=1979"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/categories?post=1979"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/tags?post=1979"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}