Real estate agent Mauricio Umansky told Claman Countdown that high mortgage rates, high prices and a lack of supply are creating difficulties for homebuyers.
Mortgage rates continued their upward trend this week, nearing 7%, threatening to dampen the typical spring buying frenzy as a combination of mortgage-payment crises threatens to dampen the typical spring buying spree.
Freddie Mac’s latest primary mortgage market study, released Thursday, found that the average benchmark interest rate 30 year fixed mortgage This week’s rate rose to 6.90% from 6.77% last week. A year ago, the average interest rate on a 30-year loan was 6.50%.
Interest rates on 15-year fixed mortgages also rose to an average of 6.29%, following last week’s 6.12%. A year ago, interest rates on 15-year fixed bonds averaged 5.76%.
An “Open House” flag flies in front of a home for sale in Alhambra, California on January 18, 2024. (Frederick J. Brown/AFP via Getty Images)/Getty Images)
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“Historically, the combination of a vibrant economy and moderate interest rate increases has not had a significant impact on the housing market,” Sam Cater, chief economist at Freddie Mac, said in a statement. “The current cycle is historic because housing affordability is so low that good economic news for homebuyers equals bad news, and homebuyers are sensitive to even the slightest change in affordability.” It differs from the standard.”
“Property for Sale” outside a home in Hercules, California on May 31, 2022. Homebuyers are facing a worsening affordability situation as mortgage rates and home prices continue to rise. (Photographer: David Paul Morris/Bloomberg via Getty Images/Getty Images)
Home buying activity tends to pick up in the spring after a winter slump, but rising interest rates and soaring home prices are causing prospective buyers and sellers to lower their prices or choose not to move. The housing market is stagnant due to this.
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“The recent surge in new listing activity suggests we may have a busy spring ahead,” said Realtor.com economist Jaiyi Xu. “However, recent increases in mortgage rates have disrupted many buyers’ plans and slowed the market, especially in a market where a significant number of consumers are expecting mortgage rates to fall rather than rise. there is a possibility.”
A “For Sale” sign is posted in front of a home in San Mateo County, California, on August 22, 2023. (Liu Guanguan/China News Service/VCG via Getty Images / Getty Images)
Robert Frick, a corporate economist at Navy Federal Credit Union, said interest rates are rising because the futures market has temporarily lost confidence that the Federal Reserve will soon lower the federal funds rate, and the housing He said this was due to a “prolonged high interest rate” scenario, which would mean higher loan rates. Too.
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“But market expectations can change quickly, and it can always take a single Fed meeting or a drop in data to cause a change,” Frick told FOX Business. “We found that mortgage rates around 7% in January actually increased existing home sales, and if interest rates fall below 6% this year, as many expect, home sales volume should accelerate.”
