Redfin CEO Glenn Kelman discusses some “promising” housing market trends on “Cavuto: Coast to Coast.”
Mortgage rates are rising again, spiking this week to near 7%, as economists warn that interest rates are likely to remain high for longer than previously expected.
The average interest rate on the benchmark 30-year fixed mortgage rose to 6.87% this week from 6.74% last week, according to Freddie Mac’s latest Primary Mortgage Market Survey released Thursday. A year ago, the average interest rate on a 30-year loan was 6.42%.
The average interest rate for a 15-year fixed mortgage also rose to 6.21% from 6.16% last week. A year ago, interest rates on 15-year fixed bonds averaged 5.68%.
Photo taken on October 19, 2022 shows homes for sale in Washington, DC (Ting Sheng/Xinhua News Agency via Getty Images/Getty Images)
Fannie Mae says mortgage interest rates will remain above 6% until 2025
This increase is a reversal from the past few weeks, when interest rates declined slightly. However, multiple industry economists have said over the past few days that mortgage rates are likely to remain high for some time, stalling as buyers and sellers look forward to further significant declines amid the affordability crisis. It warns that it is likely to further dampen the housing market.
Freddie Mac Chief Economist Sam Cater said in a statement last week:[I]In this environment, there is a good chance that interest rates will remain high for an extended period of time. ”
Fed says it is still planning three rate cuts and holds interest rates unchanged
Fannie Mae earlier this week raised its outlook for mortgage rates from just a month ago, saying it now expects 30-year fixed rates to remain above 6% for the next two years.
Meanwhile, home prices continue to rise as there is a shortage of housing inventory for buyers to choose from.
A sign outside a home for sale in Atlanta on September 6, 2023. (Ilya Nouberge/Bloomberg via Getty Images/Getty Images)
“In today’s high interest rate environment, where the supply of existing homes is limited, some existing homeowners may be hesitant to put their homes on the market,” said Hannah Jones, senior economic research analyst at Realtor.com. Deaf,” he said. ”However, the supply of new homes looks promising as home builders ramped up activity in February. ”
Jones noted that housing starts rose 5.9% last month from a year ago, and home completions rose nearly 10% annually.
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He added: “Overall, inventory for sale has shown progress on an annual basis but remains nearly 40% below pre-pandemic levels.”
