It may be a difficult time for some covid-era homebuyers as mortgage rates continue to go up and adjustable-rate mortgages are due to reset.
Since 2019, more than 1.7 million people bought a home with an adjustable-rate mortgage. Many of the loans were at five years of a lower fixed interest rate and averaged about $1 million to finance more expensive properties.
A recent survey from the Mortgage Bankers Association showed that the 30-year fixed rate rose to 7.05 percent. A mortgage based on a 2019 interest rate of 3.5% could skyrocket to double as much.
One survey says around 70% of holders are worried about payments. A Bloomberg poll found that around 10% of ARM holders believe they may not be able to meet their obligations or will have to postpone their mortgage payments when their ARM falls in line with market rates.
Ashley Massey, Global Real Estate Advisor and Author of "Fast Track Agent" said that during the time of covid, there were lower interest rates which grabbed the attention of more people who were wanting to get involved with real estate and more people looking at buying a home. Those times have since changed.
"We're out of those low interest rates and homes are sitting on the market longer, prices are going up and buyers are losing power," said Massey.
The situation isn't expected to be as bad as 2007 and some of the years to follow, but a great number of homeowners will soon face significantly higher mortgage payments.
"We're definitely hoping that that's not the case, but we could see as much as five and 10% in some places," said real estate agent Kirsten Jordan on Fox Business this week.