WEST PALM BEACH, Fla. — Mortgage rates are now hitting highs not seen in more than 20 years, and it's having an effect on housing transactions in South Florida.
"What’s happening though is we are at a stalemate," Jeff Lichtenstein of Echo Fine Properties in Palm Beach Gardens said. "Sellers don't want to move because they're hanging on to their rates."
On Wednesday, the national average rate was 7.58%, according to Bankrate.com.
That figure is a steep climb that has coincided with rising interest rates by the Federal Reserve to slow down inflation.
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The result is higher monthly payments that new buyers may want to avoid and sellers may not want to jump into with a new purchase.
The difference between a 3% rate and 7% is about $1,000 a month, according to the National Association of Home Builders.
Scripps News
Mortgage rates are the highest they've been in over 20 years
Applications for mortgages have dropped to a 28-year low, according to the Mortgage Bankers Association, highlighting the market slowdown.
The rate situation is adding to the market stress in South Florida as inventory shrinks.
"It's more exasperated in Palm Beach County because we don't have the new construction," Lichtenstein said. "If you go up to St Lucie County, [it is] a very different story because there's a building boom going on."