As the 30-year fixed mortgage rate slows for the first time in a month, a real estate investor is warning that the market is still brewing a “perfect storm” for consumers, but especially for single and multi-family buyers.
“We’re seeing an imbalance between supply and demand,” Carroll founder and CEO Patrick Carroll said on “Mornings with Maria” on Tuesday. “There aren’t that many affordable housing for people who want to move to these areas.”
“And now they have a shortage of buyers because of the mortgage interest,” continued Carroll. “So again, this was kind of a perfect storm for the lake family business.”
The real estate expert told FOX Business’s Cheryl Casone that the company has increased rents by up to 30% in the past year and acknowledged people are not happy with the increase.
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“I think one of the most important things to point out is that our costs are increasing,” explains Carroll. “So when our costs go up — our interest costs, our renovation costs, our employee costs — we have to drive those increases through rent increases.”
Real estate investor and Carroll founder and CEO Patrick Carroll warns that a supply-demand problem on top of rising mortgage rates is brewing a “perfect storm” for home buyers on “Mornings with Maria” Tuesday, July 5, 2022. (Getty Images)
Carroll remained uncertain about how long the rent increases are sustainable for both the real estate agent and the home buyer.
Renting could become a viable, permanent solution for family homes, the CEO said, pointing out that homebuilders are trying to keep up with supply chain disruptions that hinder construction and keep delivery costs high.
“[Renting] provides flexibility, and it allows people to adapt and be in these areas, but not be locked in,” Carroll said. “Homebuilders can’t keep up and they can’t make the numbers work.”
Carroll predicted that fixed mortgage rates will only rise by the end of 2022.
“I think the Fed will get a little too aggressive with rates and then have to pull out,” said the founder and CEO. “So by the end of the year I think they will be higher.”
