{"id":5244,"date":"2024-04-19T15:27:53","date_gmt":"2024-04-19T15:27:53","guid":{"rendered":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/2024\/04\/19\/homebuyers-get-hit-with-brutal-news-mortgage-rates-soar-past-7\/"},"modified":"2024-04-19T15:27:53","modified_gmt":"2024-04-19T15:27:53","slug":"homebuyers-get-hit-with-brutal-news-mortgage-rates-soar-past-7","status":"publish","type":"post","link":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/2024\/04\/19\/homebuyers-get-hit-with-brutal-news-mortgage-rates-soar-past-7\/","title":{"rendered":"Homebuyers Get Hit With Brutal News: Mortgage Rates Soar Past 7%"},"content":{"rendered":"

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ANDREW CABALLERO-REYNOLDS\/AFP via Getty Images<\/p>\n

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Mortgage rates did not simply rise this week\u2014they soared past 7% for the first time since December 2023, putting a massive hurdle in front of homebuyers hoping to find an affordable home this spring.<\/p>\n

The average rate for a 30-year fixed home loan rose from 6.88% to 7.10% for the week ending April 18, according to Freddie Mac.<\/p>\n

\u201cThe 30-year fixed-rate mortgage surpassed 7 percent for the first time this year,\u201d Sam Khater<\/strong>, Freddie Mac\u2019s chief economist, said in a statement. \u201cAs rates trend higher, potential homebuyers are deciding whether to buy before rates rise even more or hold off in hopes of decreases later in the year.\u201d<\/p>\n

Yet homebuyers feeling the sting of high mortgage rates might still be enticed to shop the growing number of homes for sale, at prices that are holding steady.<\/p>\n

\u201cFortunately, buyers will find more options than last year, and prices are staying about the same,\u201d says Realtor.com\u00ae<\/a> economic data manager Sabrina Speianu in her most recent\u00a0analysis<\/a>. \u201cHowever, affordability issues will stick around until mortgage rates drop more significantly.\u201d<\/p>\n

Here are the other vital metrics that will give homebuyers and sellers insight into the state of the real estate market in this latest installment of \u201cHow\u2019s the Housing Market This Week?<\/a>\u201d<\/p>\n

High mortgage rates may stick around<\/h2>\n

What\u2019s been triggering the spike in mortgage rates all comes down to the same answer week after week: inflation.<\/p>\n

\u201cLingering high inflation rates have deferred hopes for a Federal Reserve policy rate cut, consequently postponing expectations of meaningful declines in mortgage rates this year,\u201d says Speianu.<\/p>\n

In the big picture, the Federal Reserve\u2019s decision not to cut rates has become a \u201cfamiliar pattern,\u201d as Speianu puts it.<\/p>\n

\u201cMarch\u2019s inflation data increased the likelihood [that] we will continue to live in a prolonged period of high rates and face expensive borrowing costs, including high mortgage rates,\u201d adds Realtor.com economist Jiayi Xu<\/strong>.<\/p>\n

Home prices remain steady<\/h2>\n

In a bit of welcome news, home prices remained flat for the week ending April 13 compared with last year. (Listing prices hit a median of $424,900<\/a> nationwide in March.)<\/p>\n

\u201cLast week, the prices for homes on the market stayed steady, marking the 12th consecutive week without much change compared with last year,\u201d says Speianu. \u201cThis consistency is partly due to fewer buyers competing for homes, as interest rates have yet to significantly drop, but there has also been a shift in the types of homes available.\u201d<\/p>\n

Homes hitting the market as of late tend to be smaller and more affordable, with properties priced between $200,000 and $350,000<\/a> increasing by 30.5% in March compared with last year. Home shoppers looking to score a deal should head to warmer climes as Southern listings make up a whopping 57.4% of for-sale homes in that price range in March.<\/p>\n

Another economic factor that might take the edge off high mortgage rates is the number of sellers offering price reductions<\/a>, which reached 15% in March, a number not seen since March 2017.<\/p>\n

The impact of high mortgage rates on sellers<\/h2>\n

Buyers can look for a flush of new listings, since they\u2019re up 7.2% for the week ending April 13 compared with last year. But the growth of new listings is slowing week to week, now down to a percentage not seen since February.<\/p>\n

\u201cOngoing elevated inflation seems to be motivating more sellers, many of whom are potential buyers themselves, to wait for more stable or declining mortgage rates before making a move,\u201d says Speianu.<\/p>\n

Despite that, overall active inventory increased by 29.1% for the week ending April 13 above last year\u2019s levels for the 23rd week in a row.<\/p>\n

\u201cThere were more homes listed for sale compared with the previous year, giving homebuyers a wider selection to choose from,\u201d says Speianu.<\/p>\n

The current jump in mortgage rates will likely affect future inventory, persuading some buyers (and sellers) to drop out of the market. But this could be a good thing for those who stick around.<\/p>\n

\u201cSome buyers might wait for rates to decrease further, temporarily reducing competition and potentially lowering prices,\u201d adds Speianu.<\/p>\n

The spring market marches on<\/h2>\n

Yet affordability headwinds are not deterring determined buyers from closing the deal.<\/p>\n

In March, homes spent a median of 50 days on the market. And while homes spent the same amount of time on the market for the week ending April 13 compared with the same period last year, it\u2019s worth noting that this is still 12 days faster than the typical homebuying pace seen from 2017 to 2019.<\/p>\n

\u201cAlthough there\u2019s been a noticeable increase in inventory compared with last year, homes are still selling quite fast,\u201d says Speianu. \u201cWell-priced homes, especially starter homes, are still attracting a pool of eager buyers.\u201d<\/p>\n

The post Homebuyers Get Hit With Brutal News: Mortgage Rates Soar Past 7%<\/a> appeared first on Real Estate News & Insights | realtor.com\u00ae<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

ANDREW CABALLERO-REYNOLDS\/AFP via Getty Images Mortgage rates did not simply rise this week\u2014they soared past 7% for the first time since December 2023, putting a massive hurdle in front of homebuyers hoping to find an affordable home this spring. The average rate for a 30-year fixed home loan rose from 6.88% to 7.10% for the…Read More→<\/a><\/p>\n","protected":false},"author":0,"featured_media":5245,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-5244","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\/5244","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=5244"}],"version-history":[{"count":0,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/posts\/5244\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/media\/5245"}],"wp:attachment":[{"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/media?parent=5244"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/categories?post=5244"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/billingsrealtybrokers.paradiseinnovations.com\/index.php\/wp-json\/wp\/v2\/tags?post=5244"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}