Real estate agent Sam DeBianchi, president of DeBianchi Real Estate, gives advice to millennials struggling to buy a home on Making Money.
Mortgage rates fell this week to their lowest level in eight months, a welcome development for potential homebuyers who have been watching rates rise over the past few weeks.
Freddie Mac's latest primary mortgage market study, released Thursday, found that the average benchmark interest rate 30 year fixed mortgage This week it fell to 6.60%, down from 6.62% last week, but still up from 6.33% a year ago.
Property for sale on Elm Avenue in Toronto, ON on March 13, 2023. (Rance McMillan/Toronto Star via Getty Images)
Interest rates on 15-year fixed mortgages declined slightly for the third time in a row, averaging 5.76 times.% Last week it was 5.87%. A year ago, the average interest rate on a 15-year fixed bond was 5.28.%.
Sam Cater, Freddie Mac's chief economist, said this is the lowest interest rate since May of last year.
Families are in dire straits, and empty nesters own twice as many homes as millennials with children.
“This is an encouraging development for the housing market, especially first-time homebuyers who are sensitive to changes in housing affordability,” Carter said in a statement. “However, as purchasing demand continues to cool, already depleted sales inventories will come under further pressure.”
In the United States, as prices and interest rates rise, many homeowners are choosing not to sell their homes, resulting in a housing shortage on the market. (Frederick J. Brown/via AFP/Getty Images)
Prices remain high due to a lack of used homes for sale, but demand for newly built homes is particularly high due to the sharp drop in mortgage interest rates since autumn. However, the Commerce Department reported Thursday that construction of single-family homes fell sharply in December, an unexpected result after four months of increases in housing starts.
Home builder sentiment soars as mortgage interest rates plummet
At the same time, building permits, a leading indicator of future construction, rose last month, suggesting builders expect the housing market to improve this year, said Jeffrey Roach, chief economist at LPL Financial. said.
Home under construction in Loudonville, New York on November 8, 2023. With a shortage of existing homes for sale, homebuyers are considering new construction. (Angus Mordaunt/via Bloomberg/Getty Images)
“Demand for housing will surge in the coming months due to lower mortgage rates,” Roach said. “Despite the month-on-month decline that began in December, construction activity remains close to pre-pandemic levels.”
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“The low supply of existing homes on the market is steering potential buyers towards new construction,” he added. “Investors should expect opportunities in the homebuilding industry throughout this year.”
FOX Business' Megan Henney contributed to this report.
