With mortgage rates at highest levels since pre-pandemic, how does that impact BR housing market?

Published: Jan. 13, 2022 at 10:33 PM CST
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BATON ROUGE, La. (WAFB) - If you’re looking for a home, you really don’t have much to choose from.

On top of that, mortgage rates are at the highest level since March of 2020.

So should you be concerned?

Sometimes you just can’t resist seeing what’s out there on, but now your future forever home may not be on there at all.

“It’s a seller’s market right now, that’s indicative of low inventory. And that’s the supply-demand chain,” said Scott Gaspard with the Gaspard Team at RE/MAX First.

As the price of rent skyrockets and more folks look to settle down into something permanent, you may notice one thing in the Greater Baton Rouge area.

“Average home prices certainly have risen,” said Scott Gaspard.

Mortgage rates are at the highest level since before the pandemic.

According to Mortgage Loan Company Freddie Mac:

- 30-year fixed-rate mortgage averaged 3.45 percent with an average of 0.7 points for the week ending January 13, 2022, up from last week when it averaged 3.22 percent. A year ago at this time, the 30-year FRM averaged 2.79 percent.

- 15-year fixed-rate mortgage averaged 2.62 percent with an average of 0.7 points, up from last week when it averaged 2.43 percent. A year ago at this time, the 15-year FRM averaged 2.23 percent.

- 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.57 percent with an average of 0.3 points, up from last week when it averaged 2.41 percent. A year ago at this time, the 5-year ARM averaged 3.12 percent.

“My opinion is, if they get above 5% or something outside that we’ve been experiencing for the last couple of years, that may cause some pause,” said Gaspard.

“I would say right now, don’t buy into the fear that rates are going up, and this is the end of the real estate market,” said Ryan Larussa with GMFS Mortgage.

Larussa says while the demand to buy a house right now is very high, rates are still good.

“In 2008 rates were at 6% believe it or not. When I got into the business 20 years ago, you’re talking about rates 7.5%, 8%,” he said.

Even with everything going on in the housing market right now, believe it or not, a new article by Forbes listed Baton Rouge in the top 15 of cheapest places to live in the country.

“There’s a lot of areas to where you are seeing very affordable housing for the most part,” said Larussa.

Experts say, if you are currently looking for a house don’t let the slight change in mortgage rates scare you away.

“The rate factor of even a half of a percent increase year over year is not going to be the reason you don’t buy. That’s what I would tell you,” said Larussa.

Make sure to speak with your family, crunch the numbers, and really see what fits into your budget both in the short-term and long term.

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