Mortgage rates FALL for third consecutive week to 7.44% offering hope to homebuyers – after property sales tanked to 13-year low
Mortgage rates fell for the third consecutive week to their lowest level in more than a month offering some respite to overstretched homebuyers.
Figures from Government-backed lender Freddie Mac show the average rate on a 30-year fixed loan fell to 7.44 percent, down from 7.5 percent last week.
The market has started to settle after the Federal Reserve appeared to stop its aggressive interest rate hiking campaign. Fed officials last month voted to hold rates steady at their 22-year high of between 5.25 and 5.5 percent.
Experts are now hopeful the news will stir life back into America’s real estate landscape which has been hammered by rising rates.
Sam Khater, chief economist at Freddie Mac, said in a statement: ‘The combination of continued economic strength, lower inflation and lower mortgage rates should likely bring more potential homebuyers into the market.’
Mortgage rates fell for the third consecutive week to their lowest level in more than a month offering some respite to overstretched homebuyers
Buyers are currently facing one of the least affordable housing markets in recent memory.
Two years ago, rates on a home loan were hovering at 3.10 percent – less than half where they are now.
In real terms, it means somebody purchasing a $400,000 home in November 2021 would pay around $1,623 a month for their mortgage. This analysis assumes a 5 percent downpayment.
But the same buyer today faces monthly payments of $2,641 – more than $1,000 extra.
It is little wonder, then, that sales of previously occupied US homes fell to their slowest pace in more than 13 years in October.
Existing home sales fell 4.1% last month from September to a seasonally adjusted annual rate of 3.79 million, the National Association of Realtors said Tuesday. That’s weaker than the 3.90 million sales pace economists were expecting, according to FactSet.
Between 2013 and 2022 the percentage of Americans with full ownership of their homes increased by around 5 percent
The number of mortgage-free single-family homes increased by 7.9 million between 2012 to 2022
The last time sales slumped so hard was in August 2010, when the housing market was in recovery from a severe crash.
Despite the decline in sales, home prices keep climbing compared with this time last year, pushed up by a lack of available properties on the market.
The national median sales price rose 3.4 percent from October last year to $391,800.
‘Lack of inventory along with higher mortgage rates (are) really hindering home sales,’ said Lawrence Yun, the NAR´s chief economist.
It comes after separate data showed that the share of US homes owned outright has increased by 5 percent over ten years to an all-time high.
Last year, almost 40 percent of Americans owned their homes but a decade prior, in 2013, that number was just 34 percent, according to US Census Bureau data cited by Bloomberg.
The trend is being driven by an aging population who enjoyed relatively low mortgage rates and have had opportunities to refinance them as they aged, the outlet reported.
