DES MOINES, Iowa — As many of us head home for the holidays, high mortgage rates and home prices don’t have a lot of would-be buyers feeling too thankful these days. The days of refinancing at a lower rate or getting that great deal on a new loan are a distant memory. Moreover, new home buyers are also dealing with fewer homes on the market.
“We like old houses. I like character. I like wooden floors. I like a lot of light. Just something that was in an established neighborhood and trees which is really important to my husband,” said Spencer Dirth.
The couple began house hunting in the spring of 2022. The arrival of their son, Felix, put the first-time parents’ search on hold. It was an entirely different housing market when they picked it up again this spring.
“You put in an offer and it sells the same weekend and you put an offer in and you’re putting in offers well above the asking and getting outbid,” explained Dirth, “I swear I checked Zillow like 50 times a day. We had to have looked at 100 houses.”
While it might not have been an ideal time to buy a home, last month, their search finally came to an end when they moved into their first home.
“I said I have no option. He cannot sleep in our closet forever. He needs a bedroom. He needs a place to run around,” said Dirth.
“If you’re patient and you have a little bit of time, there’s houses out there,” said Jason Russell with Realty One Group.
Yet many would-be buyers are being priced out of the market. Mortgage rates at the highest levels in more than 20 years. The National Association of Realtors says home sales fell to a seven-month low this fall and are down more than 15% from last year. In Iowa, home sales are down nearly 18% this year.
Russell says buyers and sellers aren’t the only ones adapting to the changing market.
“You’re having to dig a little deeper. You’re having to spend a little more money on your business to create leads to buy leads so there’s plenty of real estate business in Des Moines, you just have to do it a little differently than when it was easy,” he said.
“It’s a difficult time to buy a house right now,” said Cameron McCarty, President of Vivid Tax & Wealth Advisors.
Difficult as it may be, McCarty says homeownership will always be a good investment.
“It’s just a matter of can we afford it? We’re a big fan of the 25% rule. Don’t spend in terms of your mortgage — in terms of what we can afford — no more than 25% of your take-home pay,” he explained.
“You’re either going to be paying someone else’s mortgage or you’re going to be paying your mortgage, but you do have to live someplace,” said Russell.
New housing numbers are due out this week. The Iowa Association of Realtors says it doesn’t expect much change in the numbers since this is normally the slower time of year for home sales.
