With mortgage interest rates rising, some people are giving up owning their own homes

Mortgage rates are up nearly 7%. This adds about $1,000 a month to a typical home’s mortgage payment, making home ownership out of reach for more and more Americans.

Leila Fadell, Host:

With mortgage rates hovering around 7%, some people are giving up on their dreams of buying a home. His monthly mortgage payments for a typical home are nearly $1,000 more than he was at the beginning of the year. NPR’s Chris Arnold reports.

Chris Arnold, Byline: Andrea Johansen and husband Mike aren’t living their best lives these days.

Mike Johansen: This is the camping trailer we’re staying in.

ARNOLD: Temporary. But for now, they live on Andrea’s parents’ farm in western Massachusetts, crammed into his trailer in a small camp just across from a barn with more than 100 chickens.

(rooster crowing sound bite)

Andrea Johansen: I’m calm now. I mean, they were freaking out. It starts around 4:30 in the morning. He’s about to make a Zoom call for work in the afternoon. And when the sun starts to set, they start all over again.

Johansen: They start chirping.

(rooster crowing sound bite)

Arnold: I thought this couple would be in their new house by now. But due to delays in her chain of supply, it’s not over yet. And what was supposed to be a quick stay in a camper between homes is lingering, and now, with current interest rates, a $360,000 mortgage would cost him about $800 more each month. , but this would be difficult.

Johansen: Hmm, we live in a trailer because we can’t afford to live anywhere else.

ARNOLD: Mike is a CPA and Andrea works as an engineer. They say they can afford higher mortgage payments, but that means they can’t spend or save money on other important things.

Johansen: I am 41 years old. Do you need savings for your old age?

Arnold: Some people have to stop buying houses. In Colorado, 32-year-old Hilary Torled Ho also agreed to buy a new home. But with her interest rates going up, she and her husband can no longer qualify for a mortgage.

HILLARY TOLLERUD-HO: I was told I had to pay off my husband’s credit card and make a $100,000 down payment, which I never did.

Arnold: The couple lost their security deposit of $1,000.

TOLLERUD-HO: Luckily the builders were more than understanding. Likewise, according to the contract we signed, they didn’t need to, but they returned the $5,000 deposit.

ARNOLD: Rising mortgage rates have made it impossible for millions of people to own a home. With sales slowing for the seventh month in a row, the housing market is no longer in a feverish price war and all homes are being flooded with offers. Daryl Fairweather is Redfin’s chief economist.

Darryl Fairweather: What we’re going through now is sort of a hangover for this party in the housing market that’s been going on for the past two years. was given. And now inflation is ending the party.

Arnold: The Federal Reserve has kept interest rates very low during the pandemic. That has helped push house prices up significantly – between 30% and 40% in just two years. Now the Fed is raising rates to fight inflation, which is throwing cold water on the housing market. I’m here. However, while home prices have fallen slightly over the past few months, Fairweather doesn’t expect any significant price declines to come.

FAIRWEATHER: We expect house prices to remain flat year-over-year next year. Housing looks pretty resilient so far. You know, a recession may change how sturdy it is.

ARNOLD: The biggest driver of prices is the lack of enough housing. After the last housing crash, many builders lost money and weren’t able to build enough for a decade.

Fairweather: Mortgage rates going up and down do nothing to solve the housing shortage. it will be there.

(rooster crowing sound bite)

Arnold: Andrea and Mike Johansen are back at the poultry house hoping that rates will drop before the house is finally built so they can lock in lower rates.

Johansen: Oh we hope by closing time – because they keep kicking us out. – perhaps?

Johansen: Maybe. I do not think so.

Johansen: I don’t think so either, but I have wishes, hopes and prayers.

Arnold: Chris Arnold from NPR News.

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