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Mortgage rates fall but only slightly as home prices continue rising

This week, mortgage rates fell to 6.99%. (iStock)

Mortgage rates fell last week, but not by much: Rates on a 30-year mortgage averaged 6.99%, just below 7%. Freddie Mac is The firm said in its weekly rates report.

The average 30-year fixed-rate mortgage rose just above 7% last week. Both last week’s and this week’s rates are higher than the 6.71% average rate at this time last year.

“Mortgage rates fell this week on the back of data pointing to slowing growth,” said Sam Carter, chief economist at Freddie Mac. “Interest rates are just below 7% and we expect them to decline modestly for the remainder of 2024. Potential buyers looking to buy a home this year may save some money by waiting for rates to fall, but it’s still very beneficial to shop around for the best rate.”

Rates on 15-year fixed-rate mortgages are also trending lower, but remain steady in the 6% range. This week, 15-year rates fell to 6.29% from 6.36% last week. These rates remain slightly higher than last year, when the average 15-year fixed-rate mortgage was 6.07%.

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71% of Americans will wait for interest rates to fall before buying a home: Survey

Home prices are still rising

Home prices remain high, especially in certain parts of the country. Nationwide, home prices rose 0.6% in May. According to a report from Realtor.com:.

Elsewhere in the country, prices increased even more dramatically. The hottest real estate markets saw prices increase by 13.6%, indicating that demand is growing in these markets, even though it is currently a difficult time to buy. The Manchester-Nashua metropolitan area ranked as one of the hottest markets in the country for the fifth consecutive month.

Despite soaring home prices, active listings are still rising as improving weather conditions rev up the homebuying season. Overall, active listings increased 35.2% year over year in May. Inventory in the 20 hottest markets alone increased 15.6%.

Demand remains high in these areas, creating a competitive market and driving up prices. Behind the Manchester-Nashua area, Hartford, Connecticut, is the second hottest market for buyers. Two other New England areas, Springfield, Massachusetts, and Concord, New Hampshire, ranked third and fourth, according to Realtor.com.

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Americans typically spend about 24% of their income on mortgage payments.

Rising home prices are top issue for young voters

Rising home prices are on voter minds as the election approaches, with Gen Z most concerned, with 91% citing rising home prices as a key election issue. Redfin recently.

Gen Z places more importance on housing than other generations, but all generations want the next U.S. president to address home affordability. At least 80% of all generations surveyed say home affordability is an important issue they would like to see addressed. All generations also consider home affordability to be a more important issue than abortion rights or student loan debt. Gen Z also believes addressing home affordability is more important than gun rights, foreign wars, and preserving democracy, the report found.

“Home affordability is a key issue in this year’s presidential election because even though the economy is doing pretty well, unemployment is low and wages are rising, buying a home feels out of reach for many Americans,” said Elijah de la Campa, senior economist at Redfin.

“This is especially true for young people, who are seeing the cost of buying a first home rise twice as fast as incomes. While young people care about other political issues like immigration and abortion rights, they are more likely to cite home affordability as a voting factor because it directly affects the roof over their heads, their lifestyle and their ability to build wealth,” de la Campa said.

Explore your mortgage options in minutes by visiting Credible to compare rates and lenders.

Renting is slightly cheaper than buying, and Gen Z is renting more often than buying.

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