Housing Market Updates

Lance Lambert, co-founder and editor-in-chief of Resiclub, is currently addressing substantial worries about the housing market, particularly around profitability.

Freddie Mac shared its latest primary mortgage market insights on Thursday, revealing that the average rate for benchmark 30-year fixed mortgages increased to 6.72%, up from last week’s 6.67%. Just a year ago, this rate stood at 6.89%.

The ongoing housing crisis seems to be worsening, with 47 major metropolitan areas now demanding that buyers allocate over 30% of their income for housing. Sam Carter, chief economist at Freddie Mac, noted, “After five weeks of decreases, the 30-year fixed-rate mortgage has ticked up slightly due to a stronger-than-expected employment report. Even with the persistent affordability issues in the housing market, applications for home buying and refinancing have surged by 25% and 56%, respectively, compared to last year.”

Meanwhile, the average rate for fixed mortgages from 2015 rose to 5.86% from last week’s 5.8%, with a year-ago average for a 15-year fixed note at 6.17%.

On another note, the Labor Bureau reported on Thursday that 147,000 jobs were added in June, surpassing the estimates from economists who anticipated only 110,000 new jobs. The unemployment rate slightly edged down to 4.1%, which is better than the expected 4.3%.

Overall, the job market appears resilient, but ongoing challenges in housing affordability persist, complicating the financial landscape for many. The Federal Reserve is set to keep interest rates steady at its upcoming meeting, reflecting those ongoing economic dynamics.

The likelihood of a 25-basis point interest rate cut in July has noticeably decreased, dropping from 23.8% a day prior to the report’s release to just 6.7% by Thursday.