Mortgage rates rise for the first time in weeks
Mortgage interest rates rose last week after several consecutive weeks of declines, according to the latest data by Freddie Mac.
The 30-year fixed-rate mortgage rose to 5.23% for the week ending June 9, according to Freddie Mac’s Primary Mortgage Market Survey. It is from The week before while it averaged 5.09%, and up from 2.96% last year.
Similarly, the 15-year mortgage rose to 4.38% from 4.32% the previous week and 2.23% last year. The five-year Treasury-indexed hybrid variable-rate mortgage (ARM) also rose to 4.12%, from 4.04% the previous week and 2.55% last year.
“After little movement over the past few weeks, mortgage rates have risen again on the back of increased economic activity and new inflation data,” said Freddie Mac chief economist Sam Khater.
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HOME PRICE GROWTH REACHED AN ALL-TIME HIGH IN MARCH: THIS IS HOW OWNERS CAN CASH
Home prices could start to decelerate
House prices have reached record highs, increasing by 20.6% per year in March according to the latest Case-Shiller report. This is the largest increase in the report’s history.
“Mortgages are becoming more expensive as the Federal Reserve has begun raising interest rates, suggesting that the macroeconomic environment may not support extraordinary house price growth for much longer,” said Craig Lazzara, managing director of S&P Dow Jones Indices, at the time of the report. . “While it can be safely predicted that price gains will begin to slow, the timing of the deceleration is a tougher choice.”
Other pundits agreed that rising rates could soon begin to dampen the rapid growth in house prices.
“The housing market is incredibly rate sensitive, as mortgage rates suddenly rise, demand falls again,” Khater said. “The significant decline in buying activity, combined with the increased supply of homes for sale, will cause price growth to decelerate to more normal levels, providing some relief to buyers still interested in the market. buying a house.”
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HERE ARE THE BEST DAYS OF THE YEAR TO SELL YOUR HOME
Monthly mortgage payments increase by 55% per year
Affordability has become a growing concern due to rising house prices and rising interest rates. In fact, it sent monthly mortgage payments up more than 50% for new loans on median-priced homes from a year ago, an expert said.
“Real estate markets are hurting under the weight of record prices and rising mortgage rates,” said George Ratiu, senior economist and head of economic research at Realtor.com. “Mortgage applications have fallen as purchases and refinances have seen declines in activity. Buyers of a median-priced home are looking at a monthly mortgage payment 55% higher than it was a year ago. year, adding an additional $695 to their monthly expenses.”
In addition, rising inflation has put increased pressure on consumers and pushed their spending to new heights. Americans can combat these rising costs by finding more affordable housing choices, Ratiu said.
“For many Americans looking for affordable housing stakes, mid-sized cities remain a viable alternative, especially as the number of homes for sale has increased, providing new options,” Ratiu said. “The overarching challenge is balancing the ability to find a good-priced home, which often means traveling further from city centres, with the potential need to get to an office.
“It is up to businesses to maintain flexibility for a workforce that is squeezed from all sides at once, or at risk of losing employees. The economic outlook hinges heavily on the well-being of the American consumer,” he said. -he declares.
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