{"id":2945,"date":"2023-07-29T03:44:49","date_gmt":"2023-07-29T03:44:49","guid":{"rendered":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/2023\/07\/29\/mortgage-rates-go-up-right-as-the-housing-market-melts-down\/"},"modified":"2023-07-29T03:44:49","modified_gmt":"2023-07-29T03:44:49","slug":"mortgage-rates-go-up-right-as-the-housing-market-melts-down","status":"publish","type":"post","link":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/2023\/07\/29\/mortgage-rates-go-up-right-as-the-housing-market-melts-down\/","title":{"rendered":"Mortgage Rates Go Up\u2014Right as the Housing Market Melts Down"},"content":{"rendered":"

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Getty Images<\/p>\n

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As much of the country swelters under a heat dome, the housing market is experiencing its own meltdown.<\/p>\n

Mortgage rates jumped to 6.81% for a 30-year fixed-rate loan for the week ending July 27, according to Freddie Mac. That\u2019s up from last week\u2019s average rate of 6.78%. And the welcome run of median home prices declining for 42 days flatlined for the week ending July 22.<\/p>\n

\u201cThe annual decline in the median listing price evaporated, with prices tying year-ago levels this week,\u201d says Realtor.com\u00ae<\/a>\u00a0Chief Economist\u00a0Danielle Hale<\/strong>\u00a0in her\u00a0analysis<\/a>.<\/p>\n

What\u2019s keeping home prices so high\u2014and is there any way for homebuyers to find some sweet relief from the punishing real estate market this summer? We\u2019ll break down what this latest real estate data means for homebuyers<\/a>\u00a0and\u00a0sellers<\/a>\u00a0in our latest installment of \u201cHow\u2019s the Housing Market This Week?<\/a>\u201d<\/p>\n

The Fed hiked rates\u2014what now?<\/h2>\n

For the past few months, mortgage rates have been stuck in a very unfriendly margin, hovering between 6% and 7%. It seems almost as soon as rates go down, they ratchet back up.<\/p>\n

Mortgage rates began heading north in March 2022 when the Federal Reserve began raising interest rates to tame inflation. And while mortgage rates aren\u2019t directly linked to the Fed\u2019s rates, both numbers have been rising in tandem as of late.<\/p>\n

The Fed raised interest rates<\/a> again on Wednesday. So the latest hike suggests that mortgage rates will likely remain high until the Fed\u2019s streak of raising rates ends, possibly by the close of the year.<\/p>\n

\u201cThere were no surprises regarding the latest interest rate hike by the Federal Reserve,\u201d says National Association of Realtors\u00ae Chief Economist Lawrence Yun<\/strong>. \u201cThe impact on the mortgage rate appears to be muted.\u201d<\/p>\n

But where mortgage rates head in the upcoming months remains to be seen.<\/p>\n

Home prices won\u2019t budge<\/h2>\n

While high mortgage rates have been tempered by falling home prices, that glimmer of good news has evaporated.<\/p>\n

After six consecutive weeks of declining prices, the gap between year-over-year median home listing prices shrank to 0% for the week ending July 22. The median asking price for an average home was stuck at $445,000<\/a>\u00a0in June.<\/p>\n

The likely culprit for stubbornly high prices? Sellers<\/a> with \u201cpricing power,\u201d as Hale puts it, who are sitting in the proverbial catbird seat.<\/p>\n

\u201cWith mortgage rates still high and buyers cost-sensitive, the limited number of sellers on the market may be sensing their advantage, and pricing accordingly,\u201d adds Hale. \u201cThe long-hoped-for price relief has not materialized as demand continues to outmatch limited supply, frustrating would-be homebuyers.\u201d<\/p>\n

However, some parts of the country do offer some relief for buyers in terms of affordability, notably the Northeast and Midwest<\/a>.<\/p>\n

Where are all the homes?<\/h2>\n

New listings entering the market were down for the week ending July 27 by 18% compared with a year ago, marking a 55-week streak. And active inventory (a combination of new and old listings) slumped 8% compared with the same time last year.<\/p>\n

\u201cThe size of the gap has been large and fairly consistent over the past year,\u201d notes Hale. \u201cBut as we pass the period in 2022 when new listings slowed sharply, we may see declines wane.\u201d<\/p>\n

Not that buyers should get their hopes up too<\/em> high and expect a slew of new homes to choose from. But the consistent decline in new listings might finally slow and ultimately stabilize, giving buyers some predictable ground to stand on.<\/p>\n

\u201cWith existing homeowners, choosing to sell in lower numbers than has been typical in recent years, inventory is expected to remain low, dipping by 5% overall compared to 2022,\u201d says Hale.<\/p>\n

But Hale also notes that \u201cnew construction<\/a> offers buyers a lifeline in the form of options.\u201d<\/p>\n

The market\u2019s marching to an \u2018in-between state\u2019<\/h2>\n

Fewer homes at high prices with a side of high mortgage rates means homes continue to grow stale.<\/p>\n

For the week ending July 22, homes spent nine more days on the market, marking a 53-week streak of homes taking longer to sell compared with a year ago.<\/p>\n

\u201cHigh costs continue to be a stumbling block for some buyers, weighing overall demand,\u201d says Hale.<\/p>\n

Still, the pace of home sales is ticking up. Just two weeks ago, homes spent an average of 13 extra days on the market year over year. And last week, that shrank to 10 days.<\/p>\n

\u201cAs we lap the 2022 housing slowdown period, this gap is likely to continue to shrink, and by fall we could even see homes selling faster than one year ago,\u201d says Hale. \u201cIf so, that would mean that the market is settling into an in-between state, where homes sit on the market for fewer days than pre-pandemic, but somewhat longer than was common during the height of the real estate frenzy.\u201d<\/p>\n

The post Mortgage Rates Go Up\u2014Right as the Housing Market Melts Down<\/a> appeared first on Real Estate News & Insights | realtor.com\u00ae<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Getty Images As much of the country swelters under a heat dome, the housing market is experiencing its own meltdown. Mortgage rates jumped to 6.81% for a 30-year fixed-rate loan for the week ending July 27, according to Freddie Mac. That\u2019s up from last week\u2019s average rate of 6.78%. And the welcome run of median…Read More→<\/a><\/p>\n","protected":false},"author":0,"featured_media":2946,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2945","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"_links":{"self":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts\/2945","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/comments?post=2945"}],"version-history":[{"count":0,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts\/2945\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/media\/2946"}],"wp:attachment":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/media?parent=2945"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/categories?post=2945"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/tags?post=2945"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}