NAR Chief Economist Lawrence Yun paints a picture of what could happen with borrowing costs once it passes a critical threshold. Mortgage rates remained just shy of 7% this week—the 30-year fixed rate loan is at 6.94%—which could be a “new normal” after recent rapid increases in borrowing costs, says Nadia Evangelou, senior economist and …
Tag: News
Feb 02
Second Chances
Despite signs of a housing recession, some buyers will be back to try again. The housing recession is here, but it’s not what you might think. There’s very little distress in the market, with less than 1% of home sales in foreclosure or needing a bank-approved short sale. Owners’ aggregate housing wealth, the asset valuation …
Feb 01
Buyers Embrace Adjustable Mortgages as Rates Surpass 7%
Rising interest rates have increased the average monthly loan payment by a whopping $1,000 year over year. With the rate for a 30-year mortgage rising to 7.08% this week—the highest average since April 2002, according to Freddie Mac—the average monthly loan payment is now $1,000 more than a year ago, Nadia Evangelou, senior economist and …
Jan 31
Pending Home Sales Plunge
Persistent inflation is proving “quite harmful to the housing market,” says NAR Chief Economist Lawrence Yun. The housing market is quickly contracting as rising mortgage rates and stubbornly high inflation prompts more home buyers—and even sellers—to back away. The National Association of REALTORS®’ Pending Home Sales Index, a forward-looking indicator based on home contract signings, …
Jan 30
Mortgage Rates Slip After Fed Hike, But What’s Next?
Economists eye two possible scenarios: Rates could rise to 8% or higher by the end of the year, or they could stabilize. Know what to expect. Mortgage rates this week dipped slightly below 7%, even after the Federal Reserve aggressively raised its benchmark interest rate again to tame inflation. The 30-year fixed-rate mortgage averaged 6.95% …
Jan 29
Slowdown in Home Prices
The third quarter may have marked the end of price surges as higher mortgage rates put a damper on projections for property appreciation. Read more from NAR’s latest report. Home prices continued to climb in the third quarter of this year, but the upward trend may finally be coming to an end, according to the …
Jan 26
Stabilizing Economy Holds Key to Reviving Home Sales
October’s lower inflation rate is a welcome sign for a housing market that’s seen steady declines in 2022. A recent report showing that the rate of inflation declined in October is good news for the real estate industry, and possibly a bellwether of declining mortgage rates in coming months, Lawrence Yun, chief economist for the …
Jan 25
Hope for Turnaround After Contract Signings Fall Again
Pending home sales continued to fall in October as higher mortgage rates shook buyer confidence. Read more from NAR’s latest home sales report. Pending home sales fell for the fifth consecutive month in October as rising mortgage rates brought many housing markets to a halt. But now that rates show signs of stabilizing, economists say …
Jan 24
Real Estate Wins in Government Spending Package
The omnibus bill cleared Congress on Friday and now goes to President Joe Biden’s desk for his signature. Congress gave final approval Friday to a bipartisan bill to fund the government through Sept. 30, 2023, clearing the last major piece of legislation for the year. The bill now goes to President Joe Biden for his …
Jan 23
Cooling Inflation Boosts Home Affordability
As the economy improves, mortgage rates could dip as low as the 4% range, bringing buyers back to the market. The inflation rate has been calming in recent months, contributing to falling mortgage rates through the holidays. Consumer prices are still running well above the typical 2% inflation rate, but November’s level of 7.1% was …
Jan 22
End Rate Hikes
The Fed today would do well to consider the wisdom of Wayne Gretzky. Mortgage rates fell on the day Silicon Valley Bank went bankrupt. In times of panic, financial market investors seek out the safest asset. Nothing is more secure than U.S. government bonds; they will be paid. There are, however, interest rate risks that …
Jan 19
Good Time for Investors to Unload
As rental rates slow, owners may consider returning inventory to the market. Real estate investors have done well. Rents have risen and home price appreciation has been quite exceptional. In the past three years, the typical rental rate and typical home price have soared by 16.4% and 35.5%, respectively. Over the past five years, those …
