Feb 27

Mortgage Rates Rise

The Federal Reserve is expected to raise its key benchmark rate this coming week. What impact could it have on mortgage rates?

Mortgage rates rose slightly this week ahead of the Federal Reserve’s highly anticipated meeting next Tuesday, when it is expected to increase its benchmark rate by up to a full percentage point. What impact could that have on mortgage rates ahead?

“Even though the upcoming rate hike will be more aggressive, it’s expected to have a smaller impact on mortgage rates,” Nadia Evangelou, senior economist and director of forecasting for the National Association of REALTORS®, writes at the association’s blog. “Data shows that mortgage rates have already priced in some of the effects of the upcoming Fed’s rate hikes.”

That would be welcome news to home buyers who are getting nervous about rapidly increasing borrowing costs. Rising mortgage rates are tamping down housing demand, as existing-home sales in June were down 14.2% from a year earlier, according to NAR data. The Census Bureau also reports that builders have slowed new-home construction as more buyers get priced out.

“The housing market remains sluggish as mortgage rates inch up for the second consecutive week,” says Sam Khater, Freddie Mac’s chief economist. “Consumer concerns about rising rates, inflation and a potential recession are manifesting in softening demand.”

Home affordability is worsening, with the costs of buying a home now about 80% more expensive than in June 2019 before the pandemic, Evangelou says. Nearly 25% of buyers who purchased their home in 2019 couldn’t buy at today’s higher prices and mortgage rates, she adds. The median price for an existing home climbed to a record high in June, reaching $416,000—up 13.4% compared to a year earlier, according to NAR data.

Freddie Mac reports the following national rates for the week ending July 21:

  • 30-year fixed-rate mortgages: averaged 5.54%, with an average 0.8 point, increasing from last week’s 5.51% average. Last year at this time, 30-year rates averaged 2.78%.
  • 15-year fixed-rate mortgages: averaged 4.75%, with an average 0.8 point, increasing from last week’s 4.67% average. A year ago, 15-year rates averaged 2.12%.
  • 5-year hybrid adjustable-rate mortgages: averaged 4.31%, with an average 0.3 point, dropping from last week’s 4.35% average. A year ago, 5-year ARMs averaged 2.49%.

Freddie Mac reports commitment rates along with average points to better reflect the total upfront cost of obtaining the mortgage.

©National Association of REALTORS®
Reprinted with permission

admin

For all of your Real Estate needs, place yourself in the competent hands of a career Realtor who is a Philadelphia native and Delaware County resident. Skilled, smart and enthusiastic about his work and his life, Anthony DiDonato has the appealing combination of business sense and people skills gives him an edge in an industry that demands both.

Educated at Drexel University with a dual major in accounting and finance and minors in management and psychology Anthony DiDonato offers over 25 years of experience in the real estate industry. He has been a real estate investor since 1985 and a member of H.A.P.C.O. (Landlord Association). He became a licensed Realtor in 1992 and a member of the Local, Pennsylvania and National Associations of Realtors. Anthony DiDonato is also a member of the Computerized Multiple Listings, (MLS) and Internet Marketing Programs. In 1997 Anthony DiDonato became Century 21 All-Elite, Inc. Corporate Secretary.

Anthony DiDonato believes in taking his profession to the highest level of quality service. He is known for finding that “perfect” property in Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania for his buyers and helping his sellers prepare their properties so they sell quickly and efficiently.

When it comes time to negotiate the terms of a contract, Anthony DiDonato has the knowledge, experience, and professionalism applied to meeting – or exceeding – his clients’ expectations. His service to his clients is second to none. His honesty and integrity have been his claim to fame.

For Superior Real Estate Representation in the Delaware Valley, Philadelphia, Delaware County, Chester County, Montgomery County and surrounding areas in Pennsylvania… call Anthony DiDonato.