Higher rates add hundreds of dollars in monthly costs
The housing market is about to hit another speed bump, with mortgage rates rising above 7% for the third time this year.
With home sales already weighed down by a lack of inventory of previously owned homes, and bidding wars making a comeback, rising mortgage rates only make the prospect of owning of a home more challenging.
The 30-year fixed-rate mortgage rose from 6.95% on Monday to 7.01% on Tuesday afternoon, according to Mortgage News Daily. The 30-year rate was last above 7% in March, according to historical data.
(Other groups like the Mortgage Bankers Association and Freddie Mac, which also release weekly surveys of where rates are, had yet to release their reports as of Tuesday afternoon.)
“We’ll probably need a few weeks of data to know if this is a blip or a trend,” Jacob Channel, senior economist at LendingTree, told MarketWatch.
Rates have been volatile in recent weeks, he added. “Even if they don’t stay above 7%, the fact that they’re in that 6% to 7% range [is] tough for home buyers, because home prices have remained high for most parts of the country,” Channel explained.
“The reasons for higher rates are not crystal-clear — they could reflect bond-market jitters about the unresolved debt-ceiling deadline approaching as soon as next week, or perhaps a growing concern that the Fed will opt to keep raising rates in its fight against inflation,” Jeff Tucker, senior economist at Zillow ZG, +0.22%, told MarketWatch.
“Whatever the source, these higher rates are a difficult pill for buyers to swallow, and they give homeowners all the more reason to sit tight and avoid listing their homes,” he added.
Many Americans feel despondent about the housing market. The number of people who think it’s a good time to buy a home recently hit a 45-year low.
Source: marketwatch.com | By Aarthi Swaminathan