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Mortgage Rates Soar Bad News For Homebuyers

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Many people looking to buy a home are wondering if the so-called "good times" are over. Mortgage rates soared last week to 8.5%, reaching their highest rate in more than two years. However, some experts and home buyers expect the market to remain strong.

Blake and Leah Kelso want the perfect home that fits their family. That's why they've been looking at homes for months. But their wait may have cost them. Now that interest rates have soared, they're family faces a higher monthly payment.

"We're not looking back regretting the fact that we didn't take advantage of it," says Kelso.

A half a year ago mortgage rates were around 6.7%. This means about a $640 monthly payment for a $100,000 home. With the current rates around 8%, the payment jumps nearly a $100.

"We have a surplus of buyers in the market and shortage of houses, consequently prices are going up," says Todd Weese, Coldwell Banker.

The federal reserve recently raised interest rates to keep inflation down. And the Kelso's think this will speed up current homebuyers' decisions.

"This has just encouraged us to do something quicker and stop waiting," says Kelso.

Realtors say the latest interest rates are very good if you take a historic view. In the 1980's when the rates were hitting 15,16,17 percent, experts said we would never see 10% again.

"We've seen all those predictions did not come through because we have enjoyed low interest rates the last number of years. The interest rates are still very low and still very affordable," says Jan Gordon, Greater Tulsa Association of Realtors.

But not as affordable as they were just a few months ago. Financial experts don't expect the rates to go down again until well into the next century. Tulsa Realtors say guessing on what this means in long range terms is like predicting the weather.
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