Rising interest rates are expected to slow home sales, experts say

The federal governmentraised interest rates again, and the average long-term mortgage rate saw a weekly surge, the largest in 35 years. The popular30-year fixed mortgage average rate has risen to 6% —highest since the 2008 recession. 

However, the surge in interest rates athas cooled the housing market. In St. Louis, for example, pending home sales in May fell by nearly 10% compared to the same month last year. 

According to Zonda's information in the real estate survey, typical new mortgage payments have increased by 52% in the last 6 months, so those who can still afford to buy expect prices to rise. I can do it. The company was offered to Fortune this week.

Nationally, home prices are starting to fall in some markets. 

Cheryl Leslie is looking for a home in Fort Worth, Texas and wants the price to go down so she can get closer to her grandchildren. 

She said, "I'm looking for exactly what I need, what I want, and where to go when prices go down a bit." CBS News Chris Van Cleeve. 

Housing loan applications have decreased by more than 15% compared to 2021 and decreased by 5% in May alone.  

This is urging nearly one in five people to lower prices, according to real estate broker Redfin, who announced a layoff this week due to a slowdown in the housing market. 

"The housing market is currently sluggish. It's cyclical and doesn't support previous employee numbers," said Daryl Fairweather, chief economist at Redfin.  

Analysts believe this is just the beginning and prices in some parts of the country will continue to fall. 

"Here the rise in home prices will level off and prices will fall in some of the more vibrant markets across the country. Home prices will begin to fall. It's a correction at that time. " Mark Zandy, Chief Economist at Moody's Analytics, said. 

Realtor Tina Yassin is about to sell her home in Arlington, Texas for 28 days. The house has dropped, but it still doesn't attract buyers. 

"I think this house sold six months ago," said real estate agent Tina Yasin. "It wouldn't have been on the market two weeks later." 

Yassin said the decline in demand depends on the market and region. Prices are stable in areas like Dallas Fort Worth, but most real estate agents tell sellers not to expect a bid war, especially in homes that require work. Meanwhile, prices are declining in markets such as Toledo, Ohio, Rochester, New York, and even Chicago and Los Angeles.