It has been a couple of decades since we have seen 7% interest rates on mortgages but they are back. The last time they were this high was about 20 years ago or so. I remember it well. Back then the median sale price of a house in St. paul was around $160,000, as compared with the current median home sale price of $275,000. Wages have gone up about 19% in the last 20 years.
If you bought a house the last time the rates were around 7% congratulations. It was a good investment after all.
Points are back too. To get the 6.94% interest rate the buyer has to pay a partial point. A point is 1% of the mortgage amount and is paid upfront to lower the interest rate.
It is likely that rates will go down again eventually but there isn’t any way of knowing when they will go down or by how much. Higher rates are slowing home sales but they are still defiantly selling, and quickly too. We are also seeing more price reductions.
No, we are not in a buyer’s market because of the high demand for housing. The higher rates will cool the housing market.
