Mortgage rates soar, but Lincoln home prices not expected to drop yet

LINCOLN, Neb. (KLKN) – Homebuyers and sellers might feel the impact of the highest mortgage rate in two decades.

According to the Federal Home Loan Mortgage Corporation, the 30-year fixed mortgage rate topped 7% this week.

That is more than double what it was a year ago, when it was at 3.4%.

On a $300,000 mortgage, people will now pay close to $2,000 a month.

A year ago, they would have paid around $1,300.

Experts say as these rates go up, property prices should go down.

But a real estate agent said this might not be the case in Lincoln.

“Our close sales are down about 9.5%, but the prices remain high,” said Kim Zwiener with Sellstate Empire Realty.

She said the reason prices are still high is that our market is not balanced enough.

“We don’t foresee prices going down because we still have that lack of inventory,” Zwiener said. “The supply and demand are still unbalanced a little bit.”

This rapid rise in mortgage rates is a result of the Federal Reserve hiking interest rates to fight inflation.

For those who are wanting to buy a house right now, Zwiener said it might still be a good time to do so.

“This is still a good time to buy, especially with the opportunity to refinance in a couple of years,” she said.

Zwiener said mortgage rates are predicted to drop in two years or so.

Experts are sharing some advice for those buying now. They say the most important thing is to shop around for the best deal on a mortgage.