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…
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…
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…
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…
Residential construction reversed gains in March, clocking its biggest dip since August 2023 as builders watch rising rates.
Starts and permits both slipped in March, according to data from the U.S. Census Bureau. Starts tumbled by a stunning 14.7% month-over-month to a seasonally adjusted annual rate of 1,321,000. This is below all estimates in a Bloomberg survey of economists.
Permits were down 4.3% to an adjusted rate of 1,458,000. Both single- and multi-family projects were impacted, with multi-family construction slipping to their lowest point since the beginning of the pandemic.
This is a reversal from the month prior’s boost, the result of a wave of construction resuming after winter weather restrained builders at the beginning of 2024. With milder weather,…
Click n’ Close expanded its down payment assistance loan products with a shared appreciation option.
The DPA with Shared Appreciation program gives borrowers a low interest rate for first-lien FHA and USDA loans and a repayable second lien in exchange for up to 40% of the home’s appreciation in the first five years.
After that period ends, the shared appreciation amount is added to the second lien and amortized over the remaining term.
“It’s no secret that the combination of rising interest rates, limited inventory, and growing property appreciation have made it more difficult for potential homebuyers to purchase in today’s market. While existing homeowners have benefitted tremendously from skyrocketing home equity, that same trend has put buyers at a…
The number of renters who believe they’ll never afford a home has skyrocketed in the last year as rates rose and stock shortages lifted home prices out of their late-2023 spiral.
A recent Redfin survey found that close to 38% of renters believe they are unlikely to become homeowners, up from 27% at the same time last year.
Lack of affordability is the most cited reason for their pessimism, with almost half of respondents saying houses are simply too expensive.
Trouble saving for down payments (35%), inability to afford mortgage payments (33%) and high mortgage rates (32%) accounted for the rest. Just 14% said they don’t want to own a home.
The combination of price appreciation and near-7% rates has…
Mortgage rates are marching towards 7% again as inflationary pressures threaten their stability.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.88%, up from the week prior’s 6.82%. A year ago at this time, the 30-year FRM averaged 6.27%.
The 15-year fixed rate increased from 6.06% to 6.16%. A year ago, it averaged 5.54%.
Rates have primarily stuck between 6.5% and sub-7% as they moved up in the first quarter.
Freddie Mac Chief Economist Sam Khater noted that rates moved up as inflation stayed sticky and the Central Bank’s monetary policy shifted.
“While newly released inflation data from March continues to show a trend of very little movement, the financial market’s reaction paints a far different…
Foreclosures increased nationwide in Q1 2024 as mounting affordability pressures push homeowners into situations where they are unable to pay their mortgages.
According to ATTOM’s latest Foreclosure Market Report, a total of 95,349 U.S. properties had foreclosure filings during the first quarter. This is up 3% from Q4 2023, but down under 1% YOY.
“Q1 2024’s foreclosure data reveals a market in transition, with slight increases in filings and starts, alongside a notable decrease in REO properties,” explained Rob Barber, CEO at ATTOM.
“While foreclosures remain relatively stable, we’re closely monitoring these trends. Homeowners continue to hold significant equity, contributing to a persistently hot housing market.”
REOs were up 7% from the previous quarter but plummeted by 20% YOY.
Foreclosure…
Inventory is doing best in cities with fewer mortgages and older homeowners, reinforcing the impact of high interest rates on the market.
That’s according to a new report from Zillow, which found that metros where more homes are owned outright are seeing the fastest growth in new listings.
Pittsburgh, Buffalo, and Cleveland have the highest share of homeowners free from rate lock-in.
Generationally, Baby Boomers are the most likely not to be impacted by mortgage rates when deciding to purchase a home. That’s compared to just 6% of Millennial homeowners.
More than 10 million homeowners are mortgage-free and could afford monthly payments if they decided to move today. This demographic skews older and tends to live in more affordable markets,…
