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Inflation affecting housing market and making loans more expensive

Posted at 9:36 PM, Jun 20, 2022
and last updated 2022-06-21 11:30:39-04

CORPUS CHRISTI, Texas — Inflation is affecting gas, groceries, and a lot of the other products nationwide.

But now, real estate agents are saying inflation is also affecting the housing market.

Corpus Christi real estate agent Lydia Ransom said people can’t afford to buy a house because inflation is so high on other products.

She said that, in turn, is discouraging people from buying a house.

Unfortunately for Ransom, that means she’s taking on less clients.

She said about four months ago she had about six clients and now she has one or two.

Ransom said to supplement her income, she’s having to take on a second job.

“I’ve always thought we need to have a back up, so in 2018 — my husband and I — we went in and got our life insurance license and I’ve been selling a little bit of life insurance,” Ransom said.

She said inflation is also affecting the prices of building materials like lumber.

Because of that, builders are having to increase the prices of houses even after a client has qualified for a home loan.

“My client at the time that she qualified, she was kind of maxed out at that price, and so she didn’t qualify anymore,” she said.

Her clients, the Guartuche family, just closed on their home a few weeks ago.

Prior to that, they had sold their home about seven months prior, but they were unable to buy a home, leaving them hopping from short-term rentals to hotels while trying to look for one.

Kandee Guartuche said they were looking for a V.A. or Veterans Land Board loan, but said lenders don’t make a lot of fees off them, so it was hard finding a loan in the market with the type of loan they wanted.

“I really recommend that buyers spend a lot of time researching the interest rate, researching the market, and what the process is and so that they know what they need to do before they start selling or buying a house,” Guartuche said.

Real estate agent Will Storbeck said the federal interest rate going up is making interest on loans more expensive.

“I have had some clients that aren’t able to be approved for as much as they were, so I’d say I’ve had a couple less clients than I had,” Storbeck said.

He added if a house is priced above its market value, then a seller might need to lower the price so people can afford it.

Storbeck said some sellers with homes that are sitting on the market longer are having to lower their prices, as well.

But Storbeck is staying optimistic about the future of the market.

“It’s still good to see real estate as an investment because over time it’s appreciated, but given the current circumstances, rates are going to continue to go up and that’s just the reality we’re going to have to face,” Storbeck said.