TOP STORIES As interest rates rise, the "American dream" of home...

As interest rates rise, the “American dream” of home ownership is disappearing for some.

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Home ownership seems out of reach for many Americans.

Seth Wenig/AP


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Seth Wenig/AP


Home ownership seems out of reach for many Americans.

Seth Wenig/AP

Mackenzie Bathgate and her husband John have been trying to buy a house in Lansdale, Pennsylvania for eight months.

“So far we’ve seen 28 homes in person, but ended up making seven different proposals, each one a little more aggressive than the last, simply because we’re so sick of it,” Bathgate said. “It was supposed to be exciting, but it turned out the other way around.”

Bathgate said they refused inspections and bid tens of thousands of dollars more than asked, but so far to no avail.

For now, the Bathgates have put their search on hold as interest rates have risen again.

Mackenzie Bathgate


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Mackenzie Bathgate


For now, the Bathgates have put their search on hold as interest rates have risen again.

Mackenzie Bathgate

Meanwhile, they watch interest rates go higher and higher, and each increase puts more pressure on the search for a home.

“That’s when we started to feel all this stress, like, ‘Oh my God, we have to make sure every weekend we’re focused on looking at these three specific houses that we’re interested in’ because we know they’ll have an offer accepted by Monday.” .

The couple got tired and decided to put their search on hold as the Federal Reserve raised interest rates again.
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On Wednesday, the central bank raised rates by three-quarters of a percent. This is the fourth time this has been done, a pace the United States has not seen since the late 1980s.

The average rate on a 30-year fixed mortgage is now around 5.5%, almost double what it was at the beginning of the year. according to Freddie Mac. These higher rates, combined with already high home prices, mean it’s become a lot harder to buy a home, even if the competition may be a little less fierce.

“At the national and local levels, we are seeing a cooling, declining demand and increasing supply,” said Ashley Jackson, realtor at Realty Austin in Austin, Texas. “We are seeing this everywhere, which is to be expected with such a sharp increase in interest rates.”

Jackson said the white-hot real estate market has allowed sellers and agents to become accustomed to real estate being snapped up within days and bombarded with 20 or more listing offers, many of which are in excess of the asking price.

“[Sellers] might get a little upset if their house lasts 21 days on the market, which is actually still pretty good. So it’s just a story,” said Jackson, who is also the elected president of the Austin Board of Realtors in 2022.

But there was no limit to the disappointment for homebuyers who struggled with a competitive market and a constant increase in interest rates.

Sienna Connor currently rents an apartment in Iowa City with her husband Rex and their two children. Connor began considering buying a home in 2020 just before the pandemic, but the bank said they weren’t ready.

“The mortgage lender told us that our loan should be a little higher. It took us several years to save up for a down payment, closing costs and whatnot,” said Sienna Connor.

Finally, this month they were pre-approved with an interest rate of 5%. But this rate is not fixed until they accept the house offer. Connor said that in all the time it took to save up and raise their credit, they may have missed their window.

“A few years ago, we probably would have been able to afford a decent three-bedroom home for our family. But as soon as the interest rate rises, we will actually lose all this area,” she said.

Others have been able to find opportunities within the promotion, such as Peter Hoyer and his wife Cathy Yount. After a long search, they finally get a contract for a house in Rochester, New York.

“I think they [higher interest rates] actually helped us personally because they significantly reduced the competition,” said Peter Hoyer. “So the last few proposals that we submitted, including the last one that was up to 10 or 20.”

Peter Hoyer and Cathy Yount struggled to get a house in Rochester, New York.

Contributed by Peter Hoyer


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Contributed by Peter Hoyer


Peter Hoyer and Cathy Yount struggled to get a house in Rochester, New York.

Contributed by Peter Hoyer

Hoyer said he was pleased with the stability and freedom that homeownership would provide for him and his family. But for the Bathgates in Pennsylvania, the Connors in Iowa, and countless other Americans, these luxuries seem more out of reach than ever.

For Bathgate, it’s easy.

“We just want a home,” she said. “We just want to have a family and a yard and be able to drink beer on our terrace at the end of the day. And it’s discouraging, and I feel like the American dream is no longer achievable.
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This story has been adapted for the web by Manuela López Restrepo.

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