Higher rates are dashing the dreams of some would-be homebuyers while others stretch to buy but spend close to $1,000 a month more in monthly payments for a typical house.
Mike Johansen stands by the door of the camping trailer where the couple is living while they wait for construction on their new home to be finished.
The Johansens thought they'd be in a newly built house by now. But with supply chain delays it's not finished. And so what was supposed to be a quick stay in the camper between homes is dragging on. "We were told we have to pay off my husband's credit card and have to have a $100,000 down," she says."There's no way we had that."
"What we're experiencing now is like a hangover from this party in the housing market that was going on for the last two years," says Daryl Fairweather the chief economist at Redfin."That party was fueled by cheap debt from the Federal Reserve, and now inflation is ending the party." The biggest factor propping up prices is a shortage of homes that goes back to the last housing crash. Many builders lost money. And for a decade the pace of homebuilding fell short of demand. So evenwho think prices might fall 10-20% nationally from their recent peaks are still not predicting a dramatic crash in prices. The supply of homes is still just too tight.
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