The 30-year fixed mortgage rate hit 4.46 percent in March 2018, a four-year high. Compounded by rising prices, fierce competition, and short supply, homebuyers are struggling to pay for entry into the market.
Despite a strong job market, many homebuyers in coastal regions, or those who are buying for the first time are finding it challenging to navigate the ever-widening space between what their income allows them to afford, and the median home price in their area. CBS News reports that many buyers are expanding their search to areas farther from work or city centers, in the hopes of finding a home in their price range. Others are buying fixer-uppers with a lower price tag on this, a seller's market.
The combination of low inventory, rising prices and higher mortgage rates is expected to weigh on the U.S. housing market this year, with several economists and housing experts forecasting U.S. home sales will be flat or only slightly higher than in 2017. "We've been talking about low inventory for several years, and yet inventory continues to turn lower," said Danielle Hale, chief economist for Realtor.com. "For home shoppers this spring it's going to be the most competitive market we've seen in the last few years."
