Buyers Hold Steady as Mortgage Rates Remain Flat

 As we keep an eye on the housing market, mortgage rates have remained steady this week, leaving many potential homebuyers in a holding pattern. Meanwhile, inventory is growing, but sellers are starting to pull back. Let's break down the latest market trends and what they mean for you.

Mortgage Rates Update

This week, the average 30-year fixed-rate mortgage edged up slightly to 6.78%, just above last week's 6.77%, according to Freddie Mac. The 15-year fixed-rate also saw a slight increase, reaching 6.07%. These rates have stayed relatively stable following a recent three-week decline.

What’s Next for Interest Rates?

Next week's Federal Reserve meeting is expected to provide some clarity on the future of interest rates. While a rate cut in July is unlikely, many analysts anticipate that cuts could begin in September. Danielle Hale, chief economist at Realtor.com, suggests that even a 'data dependent' stance from the Fed could hint at lower rates on the horizon, potentially helping mortgage rates to remain steady or decrease slightly.

Canada's Central Bank Takes Action

In contrast, Canada's central bank has already implemented two interest rate cuts in the past two months, bringing its key policy rate to around 4.5%. This decision comes as Canada's economy, with an unemployment rate of 6.4% in June, has been slower compared to the U.S., which had a 4.1% unemployment rate.

Buyers Remain Cautious

The current affordability challenges are impacting buyer activity. The Mortgage Bankers Association reports that the Purchase Index for mortgage applications dropped by 4% last week and is down 15% compared to last year. Joel Kan, MBA's deputy chief economist, notes that many potential buyers are still finding it challenging to make the numbers work with the current rate levels and ongoing home-price appreciation.

Inventory Trends and Seller Behavior

With home sales slowing, inventory levels are inching closer to a more balanced market. According to Redfin, new listings are up 6.1% year-over-year, and active listings have increased by 18.7%. The months of supply now stands at 3.6, edging closer to a balanced market range of four to six months. However, Mike Simonsen, founder of Altos Research, predicts that inventory will likely peak late summer or early fall, ending the year with about 20% more inventory than last year. This increase still leaves inventory well below pre-pandemic levels.

Simonsen also notes that sellers are starting to pull back, which could limit further inventory growth. This trend, coupled with Doug Duncan's observation from Fannie Mae that price growth may slow but remain positive year-over-year, suggests that the market is waiting for a shift in affordability.

The Bottom Line

As the housing market navigates these uncertain waters, many buyers are staying on the sidelines, waiting for more favorable conditions. With the Federal Reserve's next moves under close watch, and sellers pulling back, the market remains in a state of flux. For potential buyers, keeping a close eye on rate changes and inventory trends will be key to making informed decisions in the coming months.

See original article: Buyers continue to hold out as rates stay put (realestatenews.com)

Comments

Post a Comment

Popular posts from this blog

Home Warranty 101

Image
  Home Warranty 101: What You Need to Know Before Buying One If you’re a homeowner in Washington state, you might have heard of home warranty plans and wondered if they are worth it. A home warranty is a service contract that covers the repair or replacement of certain home systems and appliances when they break down due to normal wear and tear. Sounds good, right? But before you sign up for one, you should know the pros and cons of home warranty plans and how they differ from homeowners insurance and builder warranties. In this blog post, I’ll give you the lowdown on home warranty plans and help you decide if they are right for you. What are the benefits of home warranty plans? One of the main benefits of home warranty plans is peace of mind. You don’t have to worry about finding a reliable contractor or paying for expensive repairs when something goes wrong with your home. With a home warranty plan, you just pay a monthly or annual fee and a service call fee, and the home warranty co
Read more

What Are Seller Concessions in Real Estate? Here’s What You Need to Know

Image
When buying a home, you’re likely focused on the price tag, but don’t forget about the extra costs that can add up quickly. Things like closing fees, home inspections, and repairs can eat into your budget. Luckily, in some cases, you can ask the seller to help cover some of these costs through what’s known as seller concessions. Here's a breakdown of what they are and how they can work to your advantage. What Are Seller Concessions? Seller concessions are when the seller agrees to cover a portion of the buyer's closing costs or expenses, reducing the upfront costs for the buyer. For example, the seller might pay for repairs found during the home inspection or cover fees like the appraisal. The seller doesn’t have to agree, but it can be a good way to keep the deal moving forward and make the buyer happy. It’s important to note that seller concessions don’t mean the buyer will get cash back. Instead, the seller typically agrees to put part of their home sale proceeds toward the
Read more

Commercial Real Estate Recovery

Image
The commercial real estate market is showing signs of recovery, but the path forward may be a bit uneven. Key Takeaways: The Federal Reserve began cutting interest rates last month for the first time since 2020, dropping them by 50 basis points and signaling more cuts could be on the way. This policy shift is seen as a positive sign for the commercial real estate (CRE) market, as lower rates can boost refinancing and sales activity. Sales volumes are already increasing, especially in the multifamily sector, while some sectors like office space continue to face challenges. The Fed's Shift and Its Impact In September, the Federal Reserve lowered interest rates for the first time in years, cutting the Fed funds rate by 50 basis points. This is big news for commercial real estate, a sector that thrives on affordable financing. Cheaper debt could help jumpstart deal-making, which had stalled in recent years due to higher borrowing costs and economic uncertainty. The Fed's change in
Read more