That’s what the media loves to say, but on the ground in cities all across America, the real estate industry is almost at the crashed level. Under President Biden, mortgages have now become unaffordable for the majority of Americans. Yet another result of ‘Bidenomics’ as he continues to bankrupt the United States by sending billions all over the world. This is money the United State does not have. We have to borrow it all or print (counterfeit) the money, which further destroys the dollar.
This week, the cost of borrowing for home loans saw further declines, with the average rate on a 30-year mortgage dropping to its lowest level since early April, reaching 6.87% down from 6.95% last week, according to Freddie Mac. This marks the third consecutive week of declines in mortgage rates, which have mostly stayed around 7% since April. This trend comes at a time when high mortgage rates have been adding significant costs for borrowers, consequently limiting the purchasing options for many homebuyers.
Two important headlines in the Real Estate Market Today:
1. Average Long-Term US Mortgage Rate Falls Again:
– Key Points: The average long-term mortgage rates have fallen to their lowest level since early April, providing relief for prospective homebuyers and potentially… pic.twitter.com/YQ9Yqaq4kF— Seattle Condos | Jeff Reynolds (@Seattle_Condos) June 20, 2024
In addition to the 30-year mortgages, rates for 15-year fixed-rate mortgages—popular among those refinancing their home loans—also saw a slight decrease this week, moving from 6.17% to 6.13%. A year ago, this rate was slightly lower at 6.03%.
Sam Khater, Freddie Mac’s chief economist, attributed the decline in mortgage rates to cooling inflation and the market’s anticipation of a potential rate cut by the Federal Reserve. Mortgage rates are significantly influenced by the bond market’s reactions to the Federal Reserve’s interest rate policies and the movements in the 10-year Treasury yield, which is a critical benchmark for pricing home loans.
Recent economic data suggesting slower growth could help temper inflationary pressures and possibly prompt the Federal Reserve to start reducing its primary interest rate, currently at its highest in over two decades. Last week, Federal Reserve officials noted that inflation has moved closer to their 2% target and hinted at a possible rate cut later this year, though earlier projections had anticipated up to three cuts in 2024.
30-Year Mortgage Rate Falls Again, Now 6.87% https://t.co/1Pni9dHTpA pic.twitter.com/xJqrcToWAj
— The Keyser Team (@Brettproperties) June 21, 2024
Economists caution that significant drops in long-term mortgage rates are unlikely until the Fed begins to cut its short-term rates. Even when cuts begin, rates are expected to remain well above the 3.5% to 5% range that was common before the pandemic, according to Jiayi Xu, an economist with Realtor.com. The current average rate on 30-year mortgages is still near a two-decade peak, which has deterred many potential homebuyers and contributed to a sluggish spring homebuying season, with sales of previously occupied U.S. homes falling in March and April.
The housing market is also constrained by a tight supply of available homes. Although inventory has increased this year due to slower sales, it remains below pre-pandemic levels. Many homeowners are hesitant to sell and relinquish their low fixed-rate mortgages acquired more than two years ago, a situation referred to as the “lock-in” effect. Over half of all mortgaged homes have rates at or below 4%, and 87% are at or below 6%.
⚠️ US MORTGAGE RATES FALL TO 8-MONTH LOW, SAYS FREDDIE MAC (Reuters)
U.S. mortgage rates fell this week to the lowest since May 2023, Freddie Mac reported on Thursday, providing a possible boost to buyer traffic in the housing market.
The average fixed-rate 30-year mortgage… pic.twitter.com/4FhCd6TrKy
— PiQ (@PiQSuite) January 18, 2024
Despite current challenges, a stabilization around 6% could potentially motivate more homeowners to sell, increasing inventory and potentially easing home prices, as suggested by Xu.
Major Points:
- The average rate on a 30-year mortgage fell to 6.87% this week, marking its lowest level since early April and the third consecutive week of declines.
- 15-year fixed-rate mortgages also saw a decrease in rates, dropping to 6.13% from 6.17% last week.
- The reductions are attributed to signs of cooling inflation and market expectations of an upcoming Federal Reserve rate cut.
- Despite recent declines, mortgage rates remain near two-decade highs, contributing to a lackluster spring homebuying season with reduced home sales.
- A tight supply of homes on the market, exacerbated by many homeowners holding onto low-rate mortgages from over two years ago, continues to challenge the housing market.
TL Holcomb – Reprinted with permission of Whatfinger News
