“Higher For Longer” Rates Keeping Buyers Sidelined Even As Inventory Rises

Just as inventory is picking up, “higher for longer” decisions by the Feds are keeping buyers sidelined with 7% interest rates. That’s according to First American, which has released its April 2024 Home Price Index report. The data suggests that a recent uptick in inventory will boost sales activity as the spring buying season peaks but won’t result in a full turn-around of demand. Homebuyers and sellers are often the same – sellers have to buy a new home in order to move – and have a financial disincentive to do either. Nearly 90% of mortgaged homes have a rate below 6%.  At the same time, home prices are up 53% compared to pre-pandemic levels and keep rising month-over-month. Some…

Mortgage Rates Increase Again Putting Pressure On Buyers

Mortgage rates increased slightly last week, inching up after falling the week prior. Officials at Freddie Mac reported Thursday that the 30-year fixed-rate mortgage averaged 6.81%, up from 6.78%. A year ago at this time, the 30-year FRM averaged 5.30%. The 15-year fixed-rate mortgage also increased, up to 6.11% from 6.06%. A year ago, it averaged 4.58%. “Higher interest rates continue to dampen activity in interest rate-sensitive sectors, such as housing. However, overall U.S. consumer confidence is unwavering, surging to a two-year high in the Conference Board’s Consumer Confidence Index for July 2023,” said Sam Khater, Freddie Mac’s Chief Economist. “Rising consumer confidence often leads to greater spending, which could drive more consumers into the housing market.” Consumers believe that…