Zillow reports that although home prices have fallen, they are still well above pre-pandemic levels.
Experts said that rates for 30-year mortgages rose again this week, reaching their highest level since October 2008.
According to Freddie Mac’s Primary Mortgage Market Survey, the average rate of a 30-year fixed rate mortgage rose to 6.29% in the week ended Sept. 22. This is an increase from last, which averaged 6.02%, and is significantly more than last Year’s 2.88%.
Other loan terms were also higher this week. The 15-year mortgage increased to 5.44% from 5.21% last Wednesday and 2.15% from last Year. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) also rose to 4.97%, from 4.93% last Wednesday and from 2.43% last Year.
Chief economist at Freddie Mac Sam Khater stated that while home prices have fallen due to rising mortgage rates, supply remains a barrier to homebuyers’ affordability.
Khater stated that house prices have been falling due to higher interest rates, and home sales have declined. «But despite this decline in sales, there are still many homes available for sale.»
Using the Credible marketplace to quickly compare interest rates from multiple lenders is a good idea if you feel you are ready to shop around for a mortgage loan.
HOME PRICE GROWTH SLOWS IN JUNE FOR THIRD CONSECUTIVE MONTH: CASE-SHILLER INDEX
Low housing supply continues to be an obstacle.
According to Lawrence Yun (NAR chief economist), the housing inventory will remain limited for the remainder of this Year.
Yun stated that there was a lower supply of homes available, which increased the demand for new construction.
According to the latest National Association of Homebuilders/Wells Fargo Housing Market Index, builders’ confidence declined for the ninth consecutive month. In September, sentiment fell to 46 after it was at 49 in August. A score of 50 or less is considered poor. This drop in confidence is a result of high-interest rates and disruptions to building-material supply chains, as well as high home prices, which have had a negative impact on affordability.
Robert Dietz (chief economist at NAHB) stated that «builder sentiment has fallen every month in 2022.» «The housing recession is not going away as builders continue to struggle with high construction costs and an aggressive Federal Reserve monetary policy that helped push mortgage rates up above 6% last Wednesday, the highest level since 2008.
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TAPPABLE HOUSE EQUITY RISES TO A NEW RECORD HIGH
Housing prices have fallen, but affordability is still an issue.
Higher mortgage rates have dampened homebuyer enthusiasm, leading to a drop of seven consecutive months in home sales, according to Realtor.com.
However, home prices have risen by 14.1% compared to a year ago and 43.8% since August 2019. This means that affordability is still a concern for homebuyers, according to Zillow.
George Raitu is Realtor.com’s senior economist. He stated that a buyer who currently purchases a median-priced house with a 30-year fixed rate mortgage pays approximately $900 more per month than they would have paid a year ago. This would increase the homebuyer’s monthly financing costs by more than $10,000.