By ERIN FLYNN JAY
It is being speculated that once interest rates drop, a number of buyers will jump into the housing market, causing another surge in prices. We spoke to some industry leaders to get their take.
Jessica Lautz, deputy chief economist and vice president of research at the National Association of Realtors, said this is true.
“Buyers who were priced out of the housing market with rates at nearly 7% will be able to purchase. Due to limited housing inventory, the housing market may see a rebound in multiple offers, which will put upward demand on housing prices,” said Lautz.
She said a significant portion of homes are already selling at above the asking price.
“Currently, there are…
By PATRICK LAVERY
When last we heard from the Federal Reserve on interest rates, on June 14, the Federal Open Market Committee agreed not to raise the target range for the federal funds rate for the first time in more than a year.
With the Fed’s next meeting now less than a week away, could Chairman Jerome Powell be preparing to announce one of the hikes that he said in June might still be remaining for this year? Or will the FOMC stick to a holding pattern?
And how are those developments going to impact a U.S. housing market that Powell has continuously characterized as sluggish throughout 2023?
It is predicted that the central bank will deliver a quarter of…
Mortgage rates retreated last week, dropping more than ten basis points in a one-week period.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.78%, down from 6.96% the week prior. A year ago at this time, the 30-year FRM averaged 5.54%.
The 15-year fixed-rate mortgage reversed course as well, down a whopping 24 bps from 6.30% to 6.06%. A year ago, it averaged 4.75%.
“As inflation slows, mortgage rates decreased this week,” said Sam Khater, Freddie Mac’s Chief Economist. “Still, the ongoing shortage of previously owned homes for sale has been a detriment to homebuyers looking to take advantage of declining rates.”
Existing-home sales saw their most sluggish levels in 14 years in June.
At the…
Housing construction declined last month, but the future looks brighter thanks to a bump in permits.
New U.S. home construction rose for the first time in six months, according to data from the U.S. Census Bureau. Residential starts fell by 8% to an annualized rate of 1.43 million.
This is well below estimates from economists surveyed by Bloomberg, who expected a pace of 1.48 million.
Permits for new construction also dipped, down 3.7%% to a rate of 1.44 million. Permits offer an indication of how many homes will be built in the coming months.
But on the bright side, single-family construction permits in particular saw an increase, up 2.2% from May to the highest pace since June 2022.
Builders continue…
The average interest rates closed in on the 7% mark last week, pushing affordability further out of reach for many Americans.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.96%, up from 6.81% the week prior in the second week of 10+ bps jumps.
A year ago at this time, the 30-year FRM averaged 5.51%.
The 15-year fixed-rate mortgage shot up as well, from 6.24% to 6.30%. A year ago, it averaged 4.67%.
“Incoming data suggest that inflation is softening, falling to its lowest annual rate in more than two years. However, increases in housing costs, which account for a large share of inflation, remain stubbornly high, mainly due to low inventory relative to demand,” said…
Mortgage applications went up last week, benefitting from VA and FHA activity.
The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – increased by 0.9%, improving slightly after the week prior’s 4.4% decline. This week’s data includes an adjustment for the July 4th holiday.
Adjusted purchase applications rose by 2%, though the unadjusted index was down 19% from the week before and 26% lower YOY.
The bump in purchase activity is attributed to an increase in FHA and VA loan activity.
Both loan types offer major perks like low down payments and minimum closing costs to those who qualify, making them more attractive than conventional loans in the current…
Mortgage rates reversed course last week, jumping 10 bps in one week to their highest point of the year so far.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.81%, up from 6.71% the week prior.
A year ago at this time, the 30-year FRM averaged 5.30%.
The 15-year fixed-rate mortgage shot up as well, from 6.06% to 6.24%. A year ago, it averaged 4.45%.
“This upward trend is being driven by a resilient economy, persistent inflation, and a more hawkish tone from the Federal Reserve. These high rates combined with low inventory continue to price many potential homebuyers out of the market,” said Sam Khater, Freddie Mac’s Chief Economist.
Minutes from the most recent FOMC…
After an uptick last week, mortgage applications sank again, falling to their lowest level in a month as rates surged.
The Mortgage Bankers Association’s weekly survey shows the adjusted Market Composite Index – a measure of mortgage loan application volume – decreased by 4.4%, wiping out last week’s 3% gains.
Adjusted purchase applications fell by 5%, though the unadjusted index rose 6% from the week before and 22% lower YOY.
Refinances dropped, down 4% from the week prior. They remain 30% lower than the same time last year, comprising only 27.4% of total applications. In the past decade, refis averaged 58% of total activity.
The average interest rate for 30-year fixed loans rose from 6.75% to 6.85%. This is the…
Mortgage rates fell again, the third consecutive week of declines, but once again gave only an inch.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.67%, down from 6.69% the week prior.
A year ago at this time, the 30-year FRM averaged 5.81%.
The 15-year fixed-rate mortgage slipped as well, down from 6.10% to 6.03%. A year ago, it averaged 4.92%.
“Mortgage rates slid down again this week but remain elevated compared to this time last year,” said Sam Khater, Freddie Mac’s Chief Economist.
“Potential homebuyers have been watching rates closely and are waiting to come off the sidelines. However, inventory challenges persist as the number of existing homes for sale remains very low. Though, a…
Mortgage rates ticked down again, the second consecutive week of declines.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.69%, down from 6.71% the week prior.
A year ago at this time, the 30-year FRM averaged 5.78%.
The 15-year fixed-rate mortgage increased, however, up from 6.07% to 6.10%. A year ago, it averaged 4.81%.
“Mortgage rates decreased slightly this week in anticipation of the pause in rate hikes by the Federal Reserve,” said Sam Khater, Freddie Mac’s Chief Economist.
The pause did come: after ten consecutive increases, the Fed declined to raise interest rates at its June meeting.
“We have been seeing the effects of our policy tightening on demand in the most interest-rate-sensitive sectors of…
