This month is a good time for house hunters, with mortgage rates dropping slightly and more homes on the market.
According to data from Realtor.com, housing inventory is the industry term for the number and type of homes available for sale. It grew by 29% in comparison to last year. According to Freddie Mac data, the average 30-year fixed mortgage rate fell to 5.3% from 5.8% two week ago.
Although the rate drop is good news for homebuyers it’s far from the below-3% figure that buyers saw last July, according to Danielle Hale, chief economist at Realtor.com.
According to CBS News, “Even though rates have slowed a bit this week and last year, they are still much higher than they were one year ago.”
Hale stated that homebuyers should not expect mortgage rates to drop back to 3% anytime soon. She stated that the Federal Reserve is trying reduce inflation by raising interest rates. This will ensure that mortgage rates remain high for the future.
This year has been a hot one for homebuyers. With house prices reaching $500,000, skyrocketing mortgage rates, and fierce competition from buyers with higher incomes, the housing market is hot. Some middle-class Americans were unable to afford the house they longed to buy due to the rising cost of purchasing it. Many of them decided to rent instead.
Hale stated that the market is becoming more difficult for home buyers — some are just quitting and putting off their plans.
According to data from Mortgage Bankers Association, mortgage applications dropped by nearly 5.5% last week. Joel Kan, associate vice president of the association, stated Wednesday that mortgage rates are still high and have been this year. “Why applications for home purchase and refinances continue to be depressed.”
Economists say that not everyone gave up on the housing market. Others chose to persevere in their search for a deal. Hale advised buyers who are still on the market to focus their efforts on finding a home that has a lower loan payment and interest rate than their budget. She called it “rate-proofing your budget.”
