High interest rates and low inventory create a challenge for Louisville homebuyers
LOUISVILLE, Ky. (WAVE) - Higher interest rates added to the perennial problem of not enough houses for sale and you get a very tough Louisville housing market.
Lori Mangum has been looking to get out of her rental home and buy her own place for almost a year.
At first, low inventory led to some insane bidding wars.
“I was outbid by almost $50,000,” first time homebuyer Lori Mangum said as she described her house hunting experience at the end of last year. “I just couldn’t imagine going up that high from a listing price.”
Higher interest rates, according to industry insiders, put a chill in bidding wars for some houses.
But nine months later, Mangun is still renting and trying to find that first house. Higher interest rates also have her scaling back her original high expectations.
“Let’s go for a 70-30, like 70% of the things you really, really want and you can let the other 30% go,” Mangum said of her initial expectations. “So I kind of had to skim that down to like a 60-40.”
Like other potential homebuyers, Mangum is in the hunt for a real estate unicorn -- the house she’s dreamed of, that’s still affordable in the land of higher interest rates.
“It’s making it tough. I would say it’s not as tough,” Tre Pryor, Louisville realtor and editor of Louisville Home Blogs.com said. “But it’s still difficult and they basically need to lower what you can pay for what you’re going to get.”
Pryor tracked recent month-to-month comparisons to previous years and found fewer homes being sold and more competition for lower priced houses.
“Now with interest rates going up, what they used to buy for 300 thousand, looks more like maybe it’s 260 or something like that,” Pryor said. “You have to run the numbers to see, your numbers don’t go as far.”
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