Rising mortgage rates above 7% push Kansas City homebuyers toward renting, cash deals

KANSAS CITY, Mo. — KSHB 41 News reporter Lauren Schwentker covers stories in the Northland, including in Clay and Platte counties. Have a story idea? Send her an email.

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Mortgage rates topping 7% are making it harder for first-time homebuyers in the Kansas City area to enter the market, with some choosing to rent instead and others turning to cash offers to compete.

Taylor Smith said the financial reality of homeownership pushed her to stay in a rental.

"It's just getting harder and harder for us to buy a house," she said.

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Smith said everyday expenses are already stretching her budget thin.

"Gas is $5 a tank, and you can barely afford to buy groceries and pay your bills," Smith said.

She said the unpredictable costs of maintaining a home add another layer of financial risk.

"If your HVAC goes out, it's $10,000 to $15,000, and you hear these horror stories from people," Smith said.

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The Kansas City Realtors Association said the market remains incredibly tight and does not expect prices to drop anytime soon. As a result of rising interest rates, realtors across the metro are seeing a significant increase in mostly cash or all-cash buyers.

Lauren Hruby, a realtor in the Kansas City area for over 20 years, said the slower pace of the market is not entirely negative.

"The market is a little bit slower, but that's not necessarily a bad thing," Hruby said.

Hruby said buyers now have more time to save and more leverage to negotiate concessions from sellers.

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"Sometimes people have to save up a little bit more," she said. "There's hard realities, and not only with interest rates, but just inflation in general — everything is expensive right now."

Hruby said the Northland is emerging as an increasingly attractive option for buyers priced out of other parts of the metro.

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"The Northland is much more affordable than Johnson County and right here in the urban core of Kansas City. The Northland is a beautiful option that I think more and more people are realizing," Hruby said.

The Kansas City Realtors Association said the rate environment is also affecting the roughly 41,000 people currently applying for mortgages in the area.

This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.

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