Mortgage rates rose for the fifth consecutive week, Freddie Mac reported last week, with the average 30-year fixed rate hitting 7.57%. That’s the highest level since 2000, and it’s a result of the Federal Reserve’s rate-hiking campaign as it attempts to tamp down inflation.

“Marketplace” host Kai Ryssdal checked in with Vivian Gueler for a look at life in the mortgage business right now. Gueler is the chief financial officer of Pacific Trust Group, a mortgage lender in Los Angeles. The following is an edited transcript of their conversation.

Kai Ryssdal: So look, what does a mortgage lender do when mortgage rates are doing what they do right now?

Vivian Gueler: Oh gosh. You know, I probably should have taken up golf. But I think a lot of people in real estate, not just mortgage lenders, but a lot of people in real estate have side hustles. So in my case, you know, I do flip houses. So I’ve been concentrating on that a little more, because it’s just been dead quiet for the last, I’d say, four months, really.

Ryssdal: What are you going to do? Do you just wait it out?

Gueler: Yeah, we don’t have a choice. You know, there’s just really not a whole lot going on. We’re doing a few cash-out refis, some purchases. We’re seeing a little bit of down payment assistance programs outside of LA, really. But it’s either, take up a hobby or you’re going to be twiddling your thumbs. It’s pretty quiet.

Ryssdal: All right, so to your would-be clients, then. The Federal Reserve has made it pretty clear that interest rates are going to be “higher for longer,” is the the phrase in monetary policy circles. That means, like, a year or more-ish of this. What do you suppose happens to real estate?

Gueler: Well, [Fed Chair] Jerome Powell has made it very clear, he doesn’t want inflation to go back up. So they’re going to keep rates high until they feel like the economy has stabilized. Is it going to take a year? I hope not, I would say at least I don’t know, seven, eight months. And we’re just going to have to ride it out. You can look at other kinds of programs, like I said, down payment assistance. I’m seeing seller carrybacks.

Ryssdal: Sorry, what are seller carrybacks? What does that mean?

Gueler: A seller of a house is telling a potential buyer, “I’ll hold the loan, you know, at a lower rate than you’d get at a bank.” So we’re seeing a little bit of that as well. But it is making an impact that we’re seeing it, of course, nationally and in LA too, even in the city of LA, where we have our own kind of microeconomy.

Ryssdal: Right. Are you surprised, generally speaking, across the country, that prices have not fallen farther, if at all, given how high rates are?

Gueler: Not really, because everyone’s sitting on such low interest rates from the refinances that happened during COVID. So you have no incentive. You’ve got a rate of 3%, you’re going to be reluctant to give up that rate, you’re not going to want to go anywhere unless you have to.

Ryssdal: What are you looking for? What are going to be your indicators that that something has started to unfreeze?

Gueler: I think if we start to see any difference in inventory, which to be honest, I’m not sure the inventory is going to open up too much. But once we start to see more inventory, we know that housing prices will come down, and there’ll be more movement. You know, of course rates coming down, but I don’t think that’s going to happen for at least seven, eight months, like I said.

Ryssdal: Do you even go into the office anymore?

Gueler: I do. I actually do. I’m here most of the time. I mean, I certainly come in later, and I leave earlier, but anything that’s priced well is going to sell. But it is quiet. Like I said, I probably should have taken up golf a few months ago,