Mortgage rates increased for a third consecutive week, pushing averages closer to 7% and adding pressure to buyers.
Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.96%, up from 6.90%. A year ago at this time, the 30-year FRM averaged 5.22%.
The 15-year fixed-rate mortgage also increased, up to 6.34% from 6.25%. A year ago, it averaged 4.59%.
“There is no doubt continued high rates will prolong affordability challenges longer than expected, particularly with home prices on the rise again,” said Sam Khater, Freddie Mac’s Chief Economist.“However, upward pressure on rates is the product of a resilient economy with low unemployment and strong wage growth, which historically has kept purchase demand solid.”
Demand has been sluggish…
Despite being the largest cohort of potential homebuyers in the country, Millennials are lagging behind other generations in purchases.
That applies to Baby Boomers now – who are snatching up the few homes for sale thanks to home equity and greater savings – and Boomers when they were the same age as Millennials today. Just over 50% of Millennials owned a home in 2022, compared with 56.5% of Boomers in 1990 and 58.2% of Gen X in 2006.
Even the youngest generation, Gen Z, is tracking ahead of Millennials in homeownership at the same age.
A combination of forces has made it difficult for Millennials to become homeowners. Ongoing bouts of economic uncertainty in 2001, 2008, and today have hindered…
Homebuyers and sellers were feeling pessimistic about the market last month due to affordability and job security concerns.
Leaders at Fannie Mae said the Home Purchase Sentiment Index fell by 3.6 points in February, breaking three straight months of increases and pushing the index closer to a record low recorded last October.
“The decline was partly driven by a substantial decrease in consumers’ sense of home-selling conditions, with most respondents who indicated it’s a ‘bad time to sell’ citing unfavorable economic conditions and mortgage rates as the primary reasons for that belief,” said Doug Duncan, Fannie Mae Senior Vice President and Chief Economist.
“With home-selling sentiment now lower than it was pre-pandemic – and homebuying sentiment remaining near its all-time…
By KIMBERLEY HAAS The housing market traditionally cools during the holiday season as people focus on family and friends but industry leaders say it is a good time for potential sellers and buyers to weigh their options. After mortgage rates recently surged above 7%, real estate activity and consumer sentiment took a nosedive. Home delistings hit a record high in November as sellers and buyers pulled out of the market, according to journalists Lily Katz and Ben Walzer at Redfin. Markets where home prices skyrocketed during the pandemic are now cooling the fastest. In Sacramento, Calif., an average of 3.6% of active listings were delisted per week during the 12 weeks ending on November 27, up 1.6 percentage points from one year earlier.…
By CHUCK GREEN Despite a plethora of obstacles, there are prospective buyers chomping at the bit to purchase a home, according to experts. On Wednesday, Zillow Home Loans Senior Economist Matthew Speakman released a statement on mortgage rates dropping after a report on inflation showed that price pressures may finally be easing. “The arrival of weaker-than-expected October Consumer Price Index data was just the sign investors had been waiting for, and markets viewed it as a signal that the Federal Reserve may finally take its foot off the brakes as it determines the path forward for monetary policy,” Speakman said. “Bond yields tumbled as a result and mortgage rates – which had spent the last few weeks oscillating at or…
Existing-home sales dropped for the eighth straight month in September, down 1.5% from August and 23.8% YOY, according to the most recent data from the National Association of Realtors. Sales fell to a seasonally adjusted annual rate of 4.71 million and declined in three of the four major regions. The West saw no change. “Despite weaker sales, multiple offers are still occurring with more than a quarter of homes selling above list price due to limited inventory,” said NAR Chief Economist Lawrence Yun. “The current lack of supply underscores the vast contrast with the previous major market downturn from 2008 to 2010, when inventory levels were four times higher than they are today.” Inventory of unsold homes fell 2.3% from…
Most housing markets still favor sellers despite increasing buyer-friendliness, especially in more affordable markets in the South and Midwest. Knock’s Buyer-Seller Market Index found that 71 of America’s 100 largest housing markets still remain seller’s markets. “Although the general consensus is the housing market is undergoing a much-needed reset, which is welcome news to many home shoppers who will have more choices and less competition for the foreseeable future, not all markets are seeing the same trends,” said Knock Co-Founder and CEO Sean Black. “In reality, there’s a great housing divide taking place in the U.S., especially in the East and South, where despite a slowdown in sales and slower home price growth, many markets continue to favor sellers.” Fayetteville,…
Following moderating mortgage rates, pending home sales slipped only slightly in July, down 1% from June. The National Association of Realtors’ Pending Home Sales Index posted a reading of 89.8 last month. A reading of 100 is equal to the level of contract activity in 2001. Pending sales were down 19.9% YOY, slipping from last month’s 20% YOY reading. It was the second consecutive month of decline and the eighth in the last nine months. “In terms of the current housing cycle, we may be at or close to the bottom in contract signings. This month’s very modest decline reflects the recent retreat in mortgage rates. Inventories are growing for homes in the upper price ranges, but limited supply at…
In a reversal of a pandemic trend, competition for low-priced homes has surpassed that for mid- and high-priced homes, according to a new Zillow analysis. July saw inventory rise 11% month-over-month and 19.3% YOY in the most expensive third of the housing market, while the middle third also saw a 12.7% MOM and 17.3% YOY increase. Inventory grew by only 11.2% MOM and 10.4% YOY in the lowest-priced tier. A year ago, the inventory of the lowest-priced homes was growing twice as fast as expensive homes, and the upper tiers saw the strongest competition, the reverse of this month’s trend. “Buyers are stretched thin when it comes to affordability, and they are flocking to the lowest-priced homes on the market…
Affordability is at a 15-year low, with mortgage payments up in 45 of the 50 largest U.S. metros, according to Zillow’s latest market report. Buying a typical U.S. home with interest rates of 5.78% would result in monthly payments of $2,127. That’s up 36% year to date, and 51% YOY. Those monthly payments would account for 28% of homeowners’ monthly income, inching closer to the 30% benchmark that means homeowners are cost-burdened. The report noted that since rates have risen above the April data it references, homeowners may already be at that 30% threshold. Rising interest rates and soaring home prices have pushed mortgages out of reach for many Americans, leading to diminishing demand that has economists worried that recession…
