Mortgage rates fell from last week’s two-decade high but remained above 7%. The latest Freddie Mac weekly mortgage indicator shows a 7.18% 30-year fixed-rate mortgage.
NAR’s deputy chief economist, Jessica Lautz, says, “The lack of movement is discouraging to home buyers who are also facing higher home prices.”
The budgets of prospective homeowners may need to be reevaluated. Victoria Barron, a Compass real estate broker in New York and author of Every Move Matters: Unlocking Value in Life and Real Estate (Forbes Books, 2023), says, “I do not anticipate rates lowering anytime soon, and if they do come down, it will be marginal and not enough to move the needle. Accepting current interest rates and making independent decisions about renting or buying will become increasingly necessary.
According to Lautz, the average monthly payment on an existing single-family home would be $2,234 at a rate of 7.18%, while the average monthly payment on an existing condo would be $1,938. According to Lautz, the typical existing home in the West, where prices are generally higher, now has a monthly mortgage payment of $3,309. With a median home price of just $304,600 in the Midwest, a mortgage payment of just $1,651 per month would be the lowest of any major region.
Mortgage rates are expected to drop in the coming weeks, according to many economists in the real estate industry, pending the Federal Reserve’s next move. However, according to Freddie Mac’s chief economist, Sam Khater, “recent volatility makes it difficult to forecast where rates will go next,” but in September, “we should have a better gauge” as the Federal Reserve decides on its next steps regarding interest rate hikes.
According to Lautz, home buying costs will remain high “until the Fed makes the right decision on the Fed Funds rate. These increased costs will make it harder for first-time and minority buyers to enter the housing market.
For the week ending August 31st, 2018, Freddie Mac reports the following national averages for mortgage rates:
The average rate for a 30-year fixed mortgage is now 7.18%, down from 7.23% one week earlier. Rates on 30-year loans averaged 5.66 percent a year ago.
The average rate for a 15-year fixed mortgage was 6.55%, the same as it was last week. The average 15-year interest rate was 4.98% a year ago.
Published on 2023-09-06 04:46:49
