PROVO, Utah (KUTV) — Mortgage rates are rising again, crossing seven percent this week and continuing to climb.
Dejan Eskic, housing analyst at the Kem C. Gardner Policy Institute, told KUTV 2News the spike is “a result from the debt ceiling standoff” in Washington, D.C.
“This spike comes in the middle of the spring buying season and depending how long the gridlock of D.C. goes on, mortgage rates will directly respond to what they do,” Eskic said.
Until that debate is settled, it’s making it much more expensive to buy a house.
“Over the past three weeks, we’ve actually seen a one percent increase,” said Mike Roberts, owner of City Creek Mortgage in Draper. “That is a really sharp increase for such a short amount of time.”
It’s also equates to several hundred dollars more in monthly payments for a typical homebuyer.
Robert said some buyers are rushing to lock in before rates rise even more. Others are negotiating rate buydowns.
“I’d say that a high percentage of people are choosing that,” Roberts said, “give them a more affordable payment, get them through this period.”
In Provo, Wendy Nelson and her family love their home. It’s in a new neighborhood off Lakeshore Drive, right by Provo High School.
“More than half my kids will be there next year,” Nelson said, “and it’s the perfect location.”
The Nelsons moved in two years ago and consider themselves lucky to have gotten in when they did – before mortgage rates shot up.
If she tried to buy her same house today, Nelson said “we wouldn’t be living here. That would not have happened because we would have been priced out, unfortunately.”
Eskic, the housing analyst, said he expects rates will drop back down once the debt limit debate is over. Until then, Utah homebuyers are finding themselves in an even tougher position when it comes to affordability.
But if the debate isn't resolved, it could spell even more trouble for homebuyers. CBS News reports rates could rise to 8.4 percent by September if the debt ceiling is exceeded, citing a study from Zillow.