Are mortgage rates about to top 8%?

Plus, no noisy neighbors

͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌ ͏‌  October 28, 2023 • Issue #115 Happy Saturday, and happy almost Halloween! This week, we’re discussing 8% mortgage rates, homebuyers who aren’t scared by a haunted house — if the price is right, that is — and a converted church with very quiet neighbors.

Could 8% mortgage rates spook the housing market?

Money; Getty Images Mortgage rates are edging closer to 8%, sending a shiver down the real estate industry’s collective spine (and not to mention that of every homebuyer who still hopes to find their dream house). While the 30-year rate has already crossed the 8% in some rate surveys, Freddie Mac’s benchmark rate — which represents the average rate lenders offer to borrowers with excellent credit and making a 20% down payment — is still below that mark. It reached 7.79% this week, the highest level in 23 years. And if the best-qualified buyers are seeing rates that high, imagine the rate borrowers with less-than-stellar credit are offered. In a market where both buyers and sellers are already skittish due to high rates, elevated home prices and a woeful lack of inventory, this is not good news. But does it mean things will get significantly worse than they are right now? According to several experts I spoke to, the impact of an 8% mortgage rate won’t be as dire as the headlines might imply. Instead, it’ll be more like an extension of existing conditions. “I would expect current market trends to persist,” Hannah Jones, senior economic research analyst at Realtor.com, tells me, referring to the retreat of buyers and sellers from the market. Alas, the housing market is set to get even more challenging if rates continue to rise. Inventory remains close to an all-time low, which helps prop up home prices — and with higher rates and prices, the cost of financing a home will just keep increasing. But if recent predictions that the Federal Reserve might pause rate hikes come true, mortgage rates may plateau instead of climbing to new highs. We may not make it to 8% after all.

Here’s What 8% Mortgage Rates Could Mean for the Housing Market

Home Sales Slump to Slowest Pace Since the Great Recession as Costs Spike

I ain’t ’fraid of no ghosts!

Money; Getty Images Would you buy a house if you knew it was haunted? If you’re like me, the answer is probably not. I prefer undisturbed sleep and any ruckus in the home coming from me, thank you very much. But in a housing market where home buying is already the stuff of nightmares, some Americans would put their fear aside and consider rooming with some invisible friends. According to a recent study by the appropriately named Real Estate Witch, 52% of would-be homebuyers say they would consider purchasing a haunted house — especially at a reduced price: 62% would make a below-market-value offer 31% would offer $50,000 below asking price 11% would offer $100,000 below asking price Cost is a significant deciding factor on whether Americans are willing to share their home with spirits (and I’m not talking about the alcoholic kind). Forty percent of homeowners who did buy a property with paranormal activity say they were convinced because they were able to score a lower price. Other features persuaded buyers to put up with otherworldly shenanigans as well. More living space, large yards, better school districts and safer neighborhoods were all cited as reasons buyers chose a haunted home over a non-haunted one. Having the home “cleansed” beforehand or hosting Casper-style friendly ghosts, as opposed to ones that are out to get you, were also acceptable compromises for many buyers. Still, living with unseen guests can be stressful, to say the least. The study points out that 36% of homeowners who have lived in a haunted house regretted their decision, with 55% saying they would not knowingly buy another one. Boo! How about it, folks? Have any of you lived in a haunted home? If so, what was the experience like? Would you buy a house if you knew it came with ghosts? Let me know at leslie@money.com.

Buyers Are Backing Out of Home Purchases at an Incredibly High Rate

Listing of the week

Callaway Henderson Sotheby's International Realty A peaceful home the Addams Family would love This converted church, originally built in 1898 and housing what came to be known as the Locktown Christian Church, offers peace, quiet and a yard to die for. Original features include pressed-tin ceilings and a church bell, but you won’t be living in the past. The New Jersey home has been recently renovated with modern amenities like three-zone heating and cooling. If you love the open floor plan concept, this home takes it to the max with a huge living area and 20-foot-high ceilings.  Now, about that yard. It just happens to be a historic cemetery where many local families are buried. That means you’ll have no nosy neighbors to worry about (there are no reports of ghosts or ghouls roaming around either, just in case you were wondering). You’ll have to mow the lawn, but a non-profit organization takes care of the gravestones’ maintenance. The home has three bedrooms and three bathrooms and is located on an acre plot surrounded by farmland. It’s listed by Kevin Shawn McPheeters of Callaway Henderson Sotheby’s International Realty for a not-so-spooky $650,000. Callaway Henderson Sotheby's International Realty

’Til next time, P.S. Have you seen a unique listing on social media I should feature in this newsletter? Or have a question about housing or mortgages you desperately want answered? Let me know on Twitter at @LeslieLCook or via email at leslie@money.com. P.P.S. Have a friend who loves real estate or is looking for a home of their own? Please forward them this email or send them to the Money Moves subscription page.

Money’s Essential Home Buying Resources: Fall 2023

On the hunt? Check out Money’s Mortgage Calculator, list of The Best Mortgage Lenders and look at the latest mortgage rates. Thinking of refinancing? Our list of The Best Mortgage Refinance Companies can help. You can also use our Mortgage Refinance Calculator or these refi tips. Key question: How much house can I afford?

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