Home buyers in Mobile balk at 7% interest rate — priced out of the market

MOBILE, Ala. ( WKRG ) — According to a Bloomberg study from 2023, roughly 45 percent of people between the ages of 18 and 29 live at home with their parents. Experts say high interest rates prevent them from becoming home buyers.

25-year-old Coleman Emmons got married last November. He said he’s actively looking for a home, but he feels he’s being priced out of the market.

“People my age are renting not because they want to, but because we have to,” Emmons said.

Dr. Bob Wood, a finance professor at the University of South Alabama, said inflation is the driving factor behind high interest rates.

“It’s always driven by two things: primarily food and by fuel cost,” Dr. Wood explained. “Unfortunately, this right now, things are a little bit, for lack of a better term, wonky.”

According to Dr. Wood, interest rates on homes have gone from 3 percent to 7 percent, and despite the high interest rate increase, Realtor Sam Winter of Sam Winter & Co. Real Estate said homes in Mobile and Baldwin County are getting sold at a high rate.

“With interest rates still hovering around that 7%, the market is still strong,” Winter said. “There is still an abundance of buyers in the market in Mobile and Baldwin County. They’re still looking to buy.”

According to data from the Mobile Area Association of Realtors, 410 homes in Mobile County have been sold as of March 2024, and 622 in Baldwin County. The average price for a home in Mobile County is $238,000 and $477,000 in Baldwin.

Emmons hopes he can buy his dream home in his budget sooner, rather than later.

“We just got a dog not too long ago, about a month ago, and so I would love to have a good yard for him to run around in a good neighborhood,” he said.

According to Dr. Wood, the interest rates won’t return to 3% for quite a while.

He said interest rates are more than likely going to drop to 5%, but that may not be until 2027.

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