Mike Stenner, Rockville Ashburn, Diana Oleck discussed on WTOP 24 Hour News


On Saturday look for a high in the mid upper 70s The first sunshine on Sunday and Monday with highs in the upper 70s I'm storm team four meteorologist Mike stenner Mostly in the 80s now it's 83 at Rockville Ashburn at 84 and 81 outside the TOP studios 8 41 mortgage rates surged by more than half a percentage point this week It's the largest one week increase since 1987 a 30 year fixed rate mortgage is now averaging 5.78% Joining us live now for more on Skype is CNBC real estate reporter Diana oleck Nice to talk to you again Diana these higher interest rates are really putting the squeeze on first time homebuyers people looking to move up as well What is the effect for them What are home buyers to do right now Well the effect has been really fast something I've really never seen before in covering housing for a couple of decades now We've seen a huge slowdown in demand In fact I'm talking to real estate agents who are canceling open houses because they say nobody's showing up right now And they do expect that to ease up as we get further into summer because rates have just been so volatile You talked about this big one week jump that we saw but we've actually seen rates have been climbing since the beginning of this year We started right above 3% of the first of this year and now you have the 5.78 but actually from this week more recent we've seen rates climb over 6% So for first time buyers they are definitely being sidelined at the affordability has weakened dramatically And so we just have to see if rates level off a little bit so people can regroup in the market can get a handle on it Yeah so what's the best advice Diana for homeowners who want to get their house on the market Should they just expect that they're not going to get as much these days Yes the sky is no longer the limit for homeowners And that's what real estate agents are having to tell them having some tough conversations as they say you know there is still demand out there and there is still very low supply but there is more supply coming on the market and houses are sitting longer That means if you're desperate to sell don't put that high sky high price on the house Price a little lower perhaps you're not going to get bidding wars The problem right now is for a lot of sellers who might want to move they don't know what to move to because prices are just so high Also if they are going to move they're going to be trading likely a very low mortgage rate for one that's double that rate in this new market So it's a tough one on affordability for both buyers and sellers So do rising mortgage rates necessarily mean that home prices will level off or even maybe go down a little bit Well that's the big question And the expectation is that they will ease up We have seen just record high home price appreciation up over 20% from a year ago That's not normal And that's what I keep telling people So if we expect those gains to shrink even flatten even if they were around 2% remember historically home prices generally year over year appreciate about four to 6% That's a healthy market We need to get back to that to make affordability better But if they do I don't think they're going to go lower That is nationally Like we saw during the Great Recession It's just not that kind of market especially because of the supply and demand situation Again they could flatten and in some overheated markets which is not D.C. but markets like in Arizona and California Miami specifically you could see home prices weaken much further there Yeah Certainly it's uncertain times Diana always appreciate having you that CNBC real estate reporter Diana oleck coming into us this morning on Skype 8 44 If you're working in the Washington D.C..

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