Anna Vavruska and her husband would like to sell the home they purchased in the Sunnyside neighborhood at the start of the pandemic. But that would require a trade-off they aren’t willing to accept — a much higher mortgage payment.
Yet, swapping out the low 2.7% rate they have on their mortgage for one at today’s rates would boost their monthly payment by $600 to $700 — even after slapping 31% down on the next property. Welcome to the “golden handcuffs” or the “mortgage lock,” a phenomenon keeping potential home sellers in metro Denver, Colorado and across the country stuck in place and their properties off of the market.
“It will take us decades to unpack the damage done in just a few years. This will put a hold on our existing home sale inventory for many years to come,” predicts Nicole Rueth, a senior vice president with Englewood-based The Rueth Team, which is affiliated with Movement Mortgage. The Colorado Association of Realtors estimates the median sales price of a single-family home purchased in June in metro Denver was $630,000. After putting 20% down, that works out to a mortgage of $504,000.
“The vast majority of homeowners with a mortgage hold a rate that is significantly lower than those which prevail currently. With home prices up sharply in recent years, many prospective sellers are simply unwilling to put their home on the market and trade up or down into a higher cost mortgage,” said Charles Dougherty, a senior economist at Wells Fargo, one of the nation’s leading mortgage lenders.
And all of that hesitancy is contributing to a slower market. During the first half of the year, roughly 14 out of every 1,000 homes changed hands, according to. That is down from 19 out of every 1,000 homes prior to the pandemic. Turnover is at its lowest rate in at least a decade.The price of freedom
— when years worth of home price appreciation were packed into a few short months. She is advising clients who own and are looking to buy something else to convert the original home into a rental if they can pull it off.
Nigeria Nigeria Latest News, Nigeria Nigeria Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: FoxBusiness - 🏆 458. / 53 Read more »