High Bids, High Rates and a Cause for Tears? What to Make of Chaotic Housing Market

Professors Drew Sanderford and Sanket Korgaonkar help make sense of the stressful environment for home buyers.

key in lock on door

By Andrew Ramspacher, fpa5up@virginia.edu

Though summer is a time of relaxation for many, the housing market remains anything but peaceful.

Rising mortgage interest rates, bidding wars, low inventory–it’s hardly a walk on the beach.

Zillow, the popular home-searching website, recently released findings from a survey that show 50% of home buyers say the process left them in tears. Nearly 70% of respondents to Gallup’s annual Economy and Personal Finance Poll, conducted this spring, said now is a bad time to buy a home.

The numbers simply don’t lie. As of Wednesday, the average rate on a 30-year fixed mortgage was 5.55%–a roughly two percentage-point jump since January. Add on the supply chain issues, plus a recent report from real estate brokerage Redfin that cited nearly 60% of homes sold for more than their asking price in April, and you have a stressful environment for home buyers.

To help sort it all out, UVA Today caught up with a couple of experts from the University of Virginia’s McIntire School of Commerce–Drew Sanderford, the Robert M. White Jr. Bicentennial Professor of Real Estate Finance, and Sanket Korgaonkar, an Assistant Professor who holds a doctorate in Finance and Real Estate from the University of California-Berkeley.

UVA began offering a Real Estate Minor, hosted within the Commerce School, this past spring.

Read the full story in UVA Today, published June 9, 2022.

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