x
Breaking News
More () »

To buy or not to buy? High-interest rates on homes and high rental prices

"We're seeing a shortfall in the first-time homebuyer market. Those homes between $250,000- $400,000 are in the shortest supply right now," a real estate agent said.

AUGUSTA, Maine — More and more people in Maine are encountering obstacles when trying to purchase a home due to high-interest rates. 

Simultaneously, renters face their own set of struggles. 

The question arises: are rental properties overly competitive, driving up the housing market, or is it the other way around? 

According to experts, it's a combination of both factors. 

Devon Pcolar, a homeowner in Augusta, has been searching for a new home for her family for a year and a half. 

Despite putting offers on six or seven houses, most of them were either at or above the asking price, making it a challenging process for her.

"We'd pull up to these open houses, and there would be 10 cars waiting on the road to get in, and realtors sneaking people in between appointments," Devon said, highlighting the intense competition in the market.

With the difficulties faced by prospective homebuyers, many individuals across Maine are now contemplating whether to rent or buy a property.

Tyler Gaudet, a real estate broker at Sprague & Curtis, suggests that the decision depends on many factors. 

"Oftentimes rent can be very similar in cost to a mortgage, so it really comes down to how long you plan to be there and what your needs are," Tyler explained.

According to Tyler, the shortage of available homes is a significant issue. 

"We're seeing a shortfall, especially in the first-time homebuyer market. Those homes between $250,000 and $400,000 are probably in the shortest supply right now," Tyler stated.

Considering the limited availability of homes and rising rent rates in many communities, it becomes crucial to weigh various factors before making a decision. 

"As an investment advisor, we talk about how a home actually is not an investment," Jac Arbour, Founder/CEO of J.M. Arbour said. "Buying a home in a time like this would impact a person's finances for 10 years, but in some cases a lifetime."

Jac advised individuals to be patient and anticipates a decrease in prices, interest rates, and the cost of credit within the next two to three years.

While some individuals are opting to stay put and keep their costs down, families like Devon's are patiently waiting for more houses to go up for sale.

Real estate experts predict a decrease in the median sale price of homes by approximately 4 percent this year. This drop would mark the first decline since 2012, indicating a potential shift in the market dynamics.

More NEWS CENTER Maine stories

Before You Leave, Check This Out