LANCASTER COUNTY, Pa. — As the Federal Reserve continues to hike interest rates in an effort to slow inflation, the housing market is cooling off.
Nationally, home sales are down almost 24 percent compared to this time last year and interest rates have skyrocketed from under three percent to over seven percent.
"That's about $8,200 more per year in mortgage payments," said Greg Bardell, president of the Lancaster County Association of Realtors.
It's also making it more expensive for homes to be built.
"The builders have to borrow money—they're businesses—to build homes," said Yeva Nersisyan, professor of economics at Franklin & Marshall College. "And if they have to borrow that money at a higher interest rate because of Fed actions, there's going to be fewer homes that are going to be built."
With more rate hikes expected in the coming months, many are fearing a repeat of the 2008 recession.
But Bardell says there are some differences this time around that bring him optimism.
"The average sale price is 12 percent higher than it was a year ago, homes are still selling at 101 to 102 percent above asking price, even now," he explained.
Bardell says it's still a seller's market, and for buyers, now's the time to act.
"Trying to get to a home fast, get an interest rate locked in, is really an intelligent thing to be doing right now," he said.
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