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US mortgage rates are on the rise again after two consecutive weeks of decline, as the cost of home ownership continues to drive potential buyers out of the housing market.
This causes some potential buyers to drop deals, reduce competition and increase the number of homes available for sale.
| ribbon | protection | else | they change | they change % |
|---|---|---|---|---|
| a house | Anywhere real estate company | 9.73 | -0.59 | -5.72% |
| RDFN | Redfin Corporation. | 8.43 | -0.10 | -1.17% |
| RMAX | RE / MAX HOLDINGS INC. | 23.79 | -0.28 | -1.16% |
Freddie Mac’s latest preliminary mortgage market survey released Thursday shows that the average 30-year fixed-rate mortgage rate is now 5.51%, Up from 5.3% last week. This time last year, America’s most popular mortgage product averaged 2.88%.
New home for sale in Madison, Ga. ((AP Photo/John Bazemore, File)/AP Newsroom)
The 15-year average fixed interest rate is also up, rising to 4.67% from 4.45% a week ago. For the same week in 2021, the 15-year rate sat at 2.22%.
“Mortgage rates are volatile as economic growth slows due to fiscal and monetary constraints,” said Sam Khater, chief economist at Freddy Mac. “With rates higher in more than a decade, home prices at surging levels, and inflation continuing to weigh on consumers, affordability remains the main obstacle to home ownership for many Americans.”
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According to data from the Mortgage Bankers Association, the average purchase loan size fell from a record high of $460,000 reached in March, to $415,000 for the week ending July 8.
House for sale on Oak Street in Patchoug, New York (Steve Buffost/RM Newsday via Getty Images/Getty Images)
Meanwhile, demand for mortgage applications has fallen for two weeks in a row. It’s the latest sign that the housing market is calming down as Americans grapple with High inflation for 40 years The pressure on their budgets and rising interest rates inflate the cost of a monthly mortgage payment.
An increasing number of potential buyers are also becoming anxious and withdrawing from deals.
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Last month, home sale cancellations reached their highest rate since the start of the pandemic, with nearly 60,000 home purchase agreements according to one state. Redfin . analysis.
“When mortgage rates rose to nearly 6% in June, we saw a number of buyers pull back from deals,” said Lindsey Garcia, a Redfin real estate agent in Miami. “Some had to withdraw because they were no longer able to get a loan because of the jump in interest rates. Buyers are also more volatile than usual due to economic uncertainty.”
A man walks past the signs of an open house in front of condominiums for sale in Santa Monica, California (Reuters/Lucy Nicholson/Reuters Photo)
The drop in demand is already there, Redfin chief economist Daryl Fairweather said in a statement Thursday, pointing to a new report from the real estate brokerage showing that the number of homes for sale nationwide increased last month for the first time in three years.
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“The country’s economic woes have already cooled the housing market, and will likely continue to dampen demand,” Fairweather said. “The Fed has signaled it may raise interest rates further to combat stubbornly high inflation, which could hurt consumer confidence, and lower stock prices mean fewer potential homebuyers can afford a down payment.”
He advised sellers to stick, saying, “If you decide to sell, do so quickly before demand drops further. And price carefully – this is not the time to test the waters. You will do more harm than good if you overprice and have to lower prices or take the house off the market.” .
Lucas Manfredi of FOX Business contributed to this report.
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