In a country where getting a mortgage is hard enough as it is, new home shoppers will get the shock of their lives when they find that mortgage rates are higher than they have been in almost a year. Real estate professionals have been warning of this year, but not even they expected that mortgage rates would be at nearly 5% before the economy started to level out. Unemployment is still high and the cost of living has not remained level with salaries across the board. This means that it will be difficult for people to afford to purchase homes.
The real estate industry currently has a huge backlog of properties just waiting to get bought, but with banks denying mortgage applications at an astounding rate it looks like things will have to get worse before they can get better. If mortgage rates continue to rise then sellers will be forced to reduce the prices of their properties once again. Some of these seller are looking to get rid of their property because they are having financial difficulties. As it stands, property prices are extremely low, which makes it difficult for the owners to recoup their costs. Those that have good credit and easy access to cash will continue to take advantage of the current state of the property market, but for everyone else it will be hard times. Until the recession is over you can expect to pay more for on your mortgage payments, but it will be difficult to even qualify.
