Friday, June 8, 2007

More than Price keeping Buyers Away

I have an interesting perspective when it comes to the current Minneapolis real estate market. We are buyers, looking for a new home in a world of too many listings, and are seriously overwhelmed by the amount of choices available.

I find I am growing tired of looking because we just can't make a decision. At a count of about 50 homes, including new construction, the glut of homes makes the winner hard to find. This one has a great kitchen, but has outdated baths. That one has remodeled baths and kitchen, but is too small. This home has everything we need except the yard my kids need to play in. Oh, and the one that is perfect in every way is too expensive.

Now this week a new twist was thrown into the mix, interest rates have jumped dramatically in the last few weeks. Friday our lender informed us the 30-yr fixed loan we want now has a rate of 6.65%. Holy cow! It seems just last week it was at 5.75. With this news, we have decided to take a step back and see if rates will go down (hopefully like gas prices have since Memorial Day).

It makes me wonder, if we are having a problem with interest rates going up, what are other buyers out there thinking? I am pretty sure that some are waiting it out too. Most likely because they cannot afford the home they want to buy now because the monthly mortgage payment has increased. Hopefully they decline. Sellers are not the only ones feeling the pinch in this market!

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