Mortgage rates continue their meteoric rise causing 2008-like worries

Through this entire year, and you can argue the Biden Presidency, skyrocketing mortgage rates and inflation have made buying a new home virtually impossible. The rates hit their highest since 2001 in August, and now, there are reported rates could tough the 8% mark before we see Christmas time.

Realtor Michael Weaster says these new boundaries of expense are an interesting time, for both the buyer and sellers.

"I am finding more and more people holding off on trying to sell, waiting to see what the interest rates are, because the buyers are scared to buy," he says. "They do not like the higher payments...people are not buying or selling...and it is causing a slowdown in the market."

But this is not just for new buyers. This fear also extends to those looking to 'trade up,' or buy a bigger home for their families.

"They are afraid to do that...because if they try to replace the house they have now, they will have to pay much more money because of these interest rates," he says.

Nine out of every ten homeowners in the United States with mortgages, or about 46 million people, have rates below 6%.

Of course, this trend is hurting buying confidence of new, first timers, like apartment dwellers.

"It shouldn't discourage them, but it is. We have a lot of people renting, who are not going into the buyer pool simply because...this 7% or 8% interest rate scares them because they are used to these rates that are more around 3%," he says.

There has been signals from economists that inflation is cooling, and the economy is showing signs of cooling, but no guarantees have been made, and nothing will be in stone until the Fed drops rates.

But might we see that before we get to Christmas? Unlikely.

"Every economist said there would be a slowdown in the economy in the second quarter of this year, but it didn't...housing prices did not drop like they expected," he says. "So, I do not know. It looks like we are going to be status quo through the end of the year, then see what happens at the beginning of next year."

If you are trying to dip into the buying pool, you may as well sit by the water and read a book instead for now.

If you do not have a good down payment to try and get a lower interest rate...you should sit tight, and see what happens," says Weaster.