NASHVILLE, Tenn. (WTVF) — When Sarah Bendorf found her Nashville home for sale on Facebook, she acted quickly. It has been under construction ever since.
“But we thought we’d be able to refinance when we’re done — low to mid-three — and it would still be very affordable,” Bendorf said.
The problem is that since buying the house in March, mortgage rates have risen about 2%, putting Bendorf in a possible financial bind.
At the end of April, she locked in a conventional mortgage at a 45-day lock-in rate. “If we haven’t finished [with construction] in a few weeks and can close that conventional loan at 4.75 – now interest rates are in the fives and making it unaffordable,” Bendorf said.
She’s not alone – mortgage rates have risen over the past few months, which has had an impact on potential buyers like her. 30-year fixed rates are currently at 5.1%. This time last year, that figure was 2.95%.
“We are seeing our interest rates come back from a historically low rate of the last two years and they are starting to stabilize,” said Detorie Vaughn Walker, DM Group real estate agent at simpliHŌM.
That stabilization, he said, could be why the hot market in Nashville is cooling slightly.
“And when we say there’s like a downturn, what we’re saying is that instead of seeing ten offers on a house that we’re listing, we’re going to see maybe two or three,” said said Walker. “Or instead of being in the market 24 hours a day, you could be in the market for a week.”
But if you’re hoping that means respite in the market, think again.
“The need for housing in Nashville will never go away,” said Megan Thomas of the DM Group. “This city is growing, it’s turning into a big city and I don’t think we’ll see it slow down anytime soon.”
As for Bendorf, the dream of owning a home in Nashville hangs in the balance, but she still encourages others not to give up on theirs.