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Rise in interest rates expected to slow down home sales: 'The housing market is in a downturn right now'

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With the Fed raising interest rates again, average long-term mortgage rates saw their biggest one week jump in 35 years. The average rate on the popular 30-year fixed mortgage rose to 6% — the highest it has been since the 2008 recession.

But the sudden rise in interest rates is cooling off the housing market. In St. Louis, for example, pending sales of homes were down nearly 10% in May, compared to the same month last year.

"I'm looking now so that when the price has come down just a tad, I'll be able to know exactly what I need and what I want and where to go," she told CBS News' Kris Van Cleave. This is prompting nearly 1 in 5 to drop their price, according to real estate brokerage Redfin — which announced layoffs this week due to the slowing housing market.

Realtor Tina Yassin has been trying to sell a home in Arlington, Texas, for 28 days. The home saw a price drop but still hasn't attracted buyers.

 

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