Wrapped up: Mortgage rates are at their highest in 12 years… and they’re still rising

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SPOKANE, Wash. — As more people move to the Inland Northwest, it becomes harder to buy a home.

Mortgage rates hit 12-year highs and continue to rise.

Lending company Freddie Mac says the average interest rate on a 30-year fixed-rate mortgage is 5.11 percent. That’s more than two points more than last year at this time.

Combine that with high demand and rising prices – and buyers are struggling.

“That definitely made things a lot more difficult,” Jacob Stirpe said. He is in the market to buy his first house.

Stirpe says he has submitted several bids but they have all failed, in favor of cash buyers and non-traditional competitors.

“Even investors come in and bid on more than 10 houses,” he added. “They can afford it because they’re a big company.”

Realtors try to guide buyers on their home buying journey. They say it’s definitely difficult, but not impossible.

“They’re seeing their purchasing power eroding,” said real estate agent Brian Zapotocky.

He says his buyers expect mortgages of about $2,500 a month on a $350,000 home. Since the average home price in Spokane is $430,000, that means most monthly payments are even higher.

“Sometimes you’re stuck in the $3,000, $4,000, $5,000 a month,” Zapotocky said. “It’s getting really high.”

Zapotocky says that thinking outside the box goes a long way when looking for a home.

“All hands on deck – try to get that much money, make sure your credit is fantastic. Anything you can do to help yourself — get a second job,” Zapotocky said added. “IIt’s just all you can do. Everything is on the table.”

He also suggests:

  1. Using first-time home buyer programs.
  2. Ask your family for help.
  3. Make sure you have your options, because higher mortgage rates mean higher monthly payments.

Stirpe says he’s still house-hunting for now, but he’s not sure he’ll be able to secure his first home if rising interest rates force him to do so.

“I’m afraid I won’t qualify for the same amount if they keep going up, so that’s definitely a big issue,” Stirpe said.

The National Association of Realtors says these high prices are cutting home sales nationwide, which are at their slowest in almost two years.

They also predict that 1.9 million first-time home buyers in the US will be priced out this year.

READ: Wrapped Up: A family loses their home in the fire and finds the rent is double their mortgage

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