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Highest Mortgage Rates Since 2008 Housing Crisis Cool Sales


For the past two years, anyone who had a home to sell could get practically any asking price. Good shape or bad, in cities and in exurbs, seemingly everything on the market had a line of eager buyers.Now, in the span of a few weeks, real estate agents have gone from managing bidding wars to watching properties sit without offers, and once-hot markets like Austin, Texas, and Boise, Idaho, are poised for big declines.The culprit is rising mortgage rates, which have spiked to their highest levels since the 2008 housing crisis in response to the Federal Reserve’s recent efforts to tame inflation. The jump in borrowing costs, adding hundreds of dollars a month to the typical mortgage payment and coming on top of two years of home price increases, has pushed wishful home buyers past their financial limits.“We’ve reached the point where people just can’t afford a house,” said Glenn Kelman, chief executive of Redfin, a national real estate brokerage.More than any other part of the economy, housing — a purchase that for most buyers requires taking on huge amounts of debt — is especially sensitive to interest rates. That sensitivity becomes even more pronounced when homes are unaffordable, as they are now. As a result, home prices and new construction are a central …

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