Mitch Roschelle on mortgage rate increase: I feel for those first-time buyers

Mortgage rates have hit their highest level since November. The average 30 year fixed rate loan is 7.29%. Mitch Rochelle, our real estate expert in residents. What are these high mortgage rates due to an already struggling housing market? Mitch, it couldn’t be a worse time of year Stewart, for interest rates to go up because all of those people in this spring buying season now just got hit with a news flash yesterday that interest rates are not going down the more likely going up. So the timing is awful and there is a little bit of supply on the market. So I really feel for those first time buyers who are hitting the streets right now looking for homes. Yeah, On that note, look at this from the Wall Street Journal, I’m quoting. The hidden costs of home ownership are skyrocketing. Now the Journal is talking about insurance rates, property taxes, maintenance costs. Now Mitch, this is the side of inflation which we don’t see. We don’t talk about much. We concentrate on grocery store prices or the price of gas, but this is the inflation in the cost of owning a home. And to a lot of people, this is a very serious problem, right? Yes, some of those costs do are picked up in shelter costs, which is around 40% of the CPI, like property taxes or common charges if you’re a condominium owner. But insurance is a whammy. I mean, I live down in Florida, as you know, and there are many people who can’t even get renewed. Insurance is a huge issue. Property taxes are going up all over the place. So these are real costs. But the one thing to remember is those costs are also going up for landlords. So if you own apartments and you rent them out, you have the same issue with property taxes. You have the same issue with insurance. So what’s happening? Rents are going up as well. Yeah. So the, the housing problem, both owning a home and renting a home, those problems just getting worse as we speak. The cost of owning go up and because of the shortage of rental availability, rents are going up as well. This is not a good outlook at this particular time of year for the housing industry, is it? No. And and I texted Ari, your producer this morning and I said we’re in a price spiral, but we’re spiraling up because if you looked at the CPI number yesterday, our rents are up year over year over 5%. So this is not good. And I think if you’re a parent of Gen. Z Kids, get used to them living in your house for a while because the prospects of them moving out look pretty grim. That’s a it’s a grim prospect, doesn’t I mean for the future? You might look to the future and think, well, maybe things will get better in six months, but you really probably can’t say that can you? No. And you know, it’s interesting. You know, I’m, I’m always asked when’s a good time to buy a home. And I still fundamentally believe that prices are going to go up. So it’s not an issue in terms of losing value in the home but that what it will cost you to own the home with higher interest rate costs and higher you know cost to operate the home. That’s something that people really need to take into account. I have to believe it’s a negative for President Biden’s re election but that’s a that’s a political story and we won’t bother you with that Mitch Rochelle. But I agree with you, Stu. I agree with you.