The Human Cost: ‘I lost bidding war after bidding war’: If interest rates are so high, why have house prices not declined?

by | Aug 25, 2023 | Stock Market

The housing market is out of whack. The process of buying a home can be painful, and the unpredictable and counterintuitive dynamics of the current real-estate market don’t help. Painful, in fact, might be an understatement.

“It was a hellish experience,” Odeta Kushi, who bought a home last year in the D.C. metro area with her husband. One of the homes she had bid on ended up receiving 19 other offers. “That was a house that I really loved,” she said.  When Kushi had begun looking for homes two years ago, she had the exact neighborhood she wanted pinned down. It had a semi-suburban vibe, was in D.C., and had a good school district in case she wanted to expand her family.  Kushi, deputy chief economist at First American, has spent a good portion of her career building a model that can estimate the value of homes, so she knew how much to offer and — crucially — when to step out of the bidding process.  At the time, mortgage rates were hovering at around 2.9%, half of what they are in 2023, which made homeownership an even more enticing prospect. And yet Kushi knew it would not be easy.  “I lost bidding war after bidding war,” she to …

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