Average mortgage rates increased again last week, worsening affordability and setting the market up for a slump as the spring buying season progresses.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 7.17%, jumping from the week prior’s 7.1%. A year ago at this time, the 30-year FRM averaged 6.43%.
The 15-year fixed rate increased from 6.39% to 6.44%. A year ago, it averaged 5.71%.
“Despite rates increasing more than half a percent since the first week of the year, purchase demand remains steady. With rates staying higher for longer, many homebuyers are adjusting, as evidenced by this week’s report that sales of newly built homes saw the biggest increase since December 2022,” said Sam Khater, Freddie…
Pending home sales improved in March but low inventory remains a challenge to affordability.
NAR’s Pending Home Sales Index rose by 3.4% month-over-month to a reading of 78.2 last month. An index of 100 is equal to the level of contract activity in 2001.
Year-over-year, they were up a modest 0.1%, with the Midwest and West seeing improvement.
“March’s Pending Home Sales Index – at 78.2 – marks the best performance in a year, but it still remains in a fairly narrow range over the last 12 months without a measurable breakout,” said NAR Chief Economist Lawrence Yun. “Meaningful gains will only occur with declining mortgage rates and rising inventory.”
Month-over-month sales rose in all regions but the Midwest, which…
Mortgage applications declined last week as rates soared to a new high for 2024.
The Mortgage Bankers Association’s weekly survey shows that the adjusted Market Composite Index — a measure of mortgage loan application volume — fell by 2.7%.
Adjusted purchase applications slipped by 1%, while the unadjusted index was up 0.2% and 15% lower YOY.
Homebuyers are facing the highest rates of the year, with the 30-year fixed rate jumping to 7.24%. This is their highest point since late 2023.
“Purchase applications declined, as homebuyers delayed their purchase decisions due to strained affordability and low supply,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist.
Notably, the share of ARM applications shot up to 7.6% as buyers looked…
New home sales rebounded in March as an unexpected February downturn corrected.
That’s according to data from the U.S. Census Bureau and the Department of Housing and Urban Development, which reported sales rising by 8.8% to a seasonally adjusted annual rate of 693,000, an increase from the month priors’ revised rate of 637,000.
Sales were up 8.3% from the same time last year.
The increase reverses a surprise downturn the month prior that took analysts by surprise, the first bad news in three months. Existing inventory saw a bump and, being generally cheaper and more attractive to buyers, took a greater share. But as rates keep rising, more and more homeowners are delaying selling, putting new construction front and center.…
By SCOTT KIMBLER
Home price appreciation will continue to climb throughout 2024, according to the latest analysis by leaders at AEI Housing Center.
Tobias Peter, co-director and senior fellow at AEI, spoke during a presentation earlier this month and said even though purchase volume is down, data suggests home price appreciation will rise over the course of this year.
Peter said because buyers are well qualified and there is continued competition due to the strong sellers’ market, HPA is expected to be around 5% by December.
Those numbers can vary. A bullish projection shows an increase of between 6% and 8%. A bearish projection ranges from 0% to -2%.
Data from February showed month-over-month HPA was up 1.1%, a reversal…
Average mortgage rates surpassed 7% for the first time in 2024 last week.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 7.1%, jumping from the week prior’s 6.88%. A year ago at this time, the 30-year FRM averaged 6.39%.
The daily rate shot up to 7.5% in the middle of this week.
The 15-year fixed rate increased from 6.16% to 6.39%. A year ago, it averaged 5.76%.
“As rates trend higher, potential homebuyers are deciding whether to buy before rates rise even more or hold off in hopes of decreases later in the year. Last week, purchase applications rose modestly, but it remains unclear how many homebuyers can withstand increasing rates in the future,” said Sam…
Existing home sales dropped in March as the cost of homebuying continues to worsen.
Sales fell by 4.3% in March to a seasonally adjusted annual rate of 4.19 million. They were down 3.7% YOY.
The median existing sales price was up 4.8% YOY to $393,500, the highest price ever recorded for the month of March and the ninth consecutive monthly price gain.
“Though rebounding from cyclical lows, home sales are stuck because interest rates have not made any major moves,” said NAR Chief Economist Lawrence Yun. “There are nearly six million more jobs now compared to pre-COVID highs, which suggests more aspiring home buyers exist in the market.”
Buyer demand metrics do appear to be up, though, with home tours…
The cost of buying a home hit another record high as rising rates intersected with home price growth.
The median U.S. home sale price increased 5% YOY to $380,250 during the four weeks ending April 14. This is just a few grand below June 2022’s all-time high.
At the same time, mortgage rates have jumped up over 7% in recent weeks as inflation data forced the Central Bank to walk back its talk of rate cuts. Some analysts who previously predicted three cuts from the Fed in 2024 now say there may be none at all.
“I think we’re still expecting a couple but clearly we continue to kick the can down the road on rate cuts, and it wouldn’t…
Americans watching cable news might have been cheered when they saw the latest jobs report: the United States added 303,000 new nonfarm jobs in March and unemployment fell to 3.8%. Both numbers exceeded expectations.
But viewers who are also shopping for a mortgage may have had a different reaction. Economics and housing experts say less unemployment means more pressure on Federal Reserve Chair Jerome Powell to keep interest rates high. And the result has been an uptick in rates.
Powell has made it clear his priority is getting inflation under control. His target number for rising prices is a 2% annual rate. Instead, prices have been rising nearly twice that fast, and the inflation rate has been higher than expected…
Single-family home prices soared in the first quarter of 2024, starting the year off with an unaffordable pop.
Prices were up 7.4% from Q1 2022 to Q1 2024, according to Fannie Mae’s latest Home Price Index. Fannie Mae measures the average, quarterly price change for all single-family properties in the United States, excluding condos.
The index also measured a quarterly increase of 1.7%, effectively the same as the growth registered in Q4 2023.
“Home prices continued to rise in the first quarter as the housing market remained seriously supply constrained,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist.
Duncan noted that stabilizing rates brought some buyers and sellers off the sidelines in January, providing a demand boost…
