Are you ready for the latest rollercoaster ride in the world of real estate? Well, buckle up because mortgage rates are on the rise again, zooming towards the dreaded 7% mark. According to Freddie Mac’s latest data, the average rate on the 30-year fixed mortgage has climbed to 6.87% this week from 6.74% just last week. If you’re feeling a bit of déjà vu, you’re not alone. A year ago, the average rate on a 30-year loan was a much more palatable 6.42%.
But wait, there’s more! The 15-year fixed mortgage isn’t lagging behind either. It has also taken a leap, rising to 6.21% from 6.16% in the previous week. Compared to a year ago when it was at 5.68%, the difference is enough to make any potential homebuyer break a sweat. And it doesn’t stop there. Brace yourself because this party in the sky is expected to last longer than a quick joyride.
Economists are waving red flags, cautioning that these elevated rates are here to stay. The once hopeful whispers of a rate drop seem to have dissipated into thin air, leaving both buyers and sellers in a state of uncertainty. Sam Khater, Freddie Mac’s chief economist, has bluntly stated that we might as well get comfy with the idea of high rates sticking around.
Fannie Mae has also chimed in, painting a gloomy picture of the future. They’ve revised their forecast, predicting that the 30-year fixed rates will stubbornly hover above 6% for the next couple of years. It’s a tough pill to swallow, especially in an already strained housing market where affordability is becoming a distant dream for many.
Despite the hurdles, there’s a glimmer of hope on the horizon. Homebuilders seem to be stepping up to the plate, with housing starts showing a decent 5.9% increase year over year. Additionally, home completions have seen a significant 10% bump compared to last month. So, while existing homeowners might be hesitant to dip their toes in the selling pool, new construction could help alleviate some of the supply shortages.
In the midst of all this upheaval, one thing is certain – the real estate market is in for a wild ride. So, whether you’re a seasoned investor or a first-time buyer, hold on tight and keep your eyes peeled for opportunities amidst the chaos.
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