Rising Interest Rates Driving Down Home Prices

Rising Interest Rates Driving Down Home Prices

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Susan Wood ReportingA recent rise in mortgage interest rates is having an effect on the sale of homes in the Salt Lake Valley. While homes in some prices ranges are selling well, others are suffering. And if rates increase more, realtors say sales could stall even further.

Crystal Van Komen has been running her nail business from her basement for two more weeks. She just sold her house after four months of showings.

Crystal Van Komen, Selling Home: "A lot of people that said they were interested and would tell our realtor and they'd never come back, but I think there's a lot of homes on the market now too."

There was a surge of home sales when interest rates dropped down to four and a half percent a month and a half ago. But now rates are on the rise.

Jimmy Wu, Coldwell Banker Realtor: "A lot of my buyers who were looking decided to cancel."

Combine the interest rate hike with Utah's poor job market and it's really hard to sell a luxury home. Paul Cook has had his home on the market for around six months.

Paul Cook, Selling His Home: “A lot of people come and look but they don't want to spend the money because they're unsure about the jobs and security and it makes it tough."

The majority of homes that are selling are between 120 and 170 thousand dollars and most of them are to first time home buyers. And what many sellers and buyers are finding is that means a little lower price.

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