Washington Examiner columnist Tiana Lowe Doescher and FOX Business’ Lydia Hu join Making Money host Charles Payne to discuss the impact of the housing crisis on young people.
Mortgage rates continued to rise this week, adding further pressure to the cooling housing market as more Americans refrain from buying a home.
Freddie Mac reported Thursday that the average interest rate on the benchmark 30-year fixed mortgage rose to 7.63%, up from 7.57% last week and 6.94% a year ago.
A for sale sign hangs in front of a home in San Mateo County, California, on August 22, 2023. Mortgage rates continue to rise in the U.S., making it harder for Americans to afford a home. (Liu Guanguan/China News Service/VCG via Getty Images / Getty Images)
The interest rate on a 15-year mortgage also rose to an average of 6.92%, from 6.89% last week. A year ago, the interest rate on a 15-year fixed bond averaged 6.23%.
Freddie Mac chief economist Sam Khater recommends borrowers consider their options with multiple lenders before committing to loan terms, as mortgage rates are expected to rise even further.
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“Mortgage rates continued to approach eight percent this week, further impacting affordability,” Khater said in a statement. “In this environment, it is important that borrowers shop around for the best mortgage rate from multiple lenders. Because research shows that the down payment is the biggest barrier for first-time home buyers to own a home, borrowers should also ask their lender about down payment assistance.”
A sign outside a home for sale in Atlanta, Georgia, U.S., on Wednesday, September 6, 2023. U.S. home prices rose for the third consecutive month in September. (Elijah Nouvelage/Bloomberg via Getty Images / Getty Images)
Home affordability in the U.S. continues to decline as home prices remain high due to a lack of supply, while rising mortgage rates continue to drive up payments.
Home foreclosures are on the rise nationwide
In a market where interest rates are rising as quickly as they have under the Federal Reserve’s aggressive rate hike campaign, home prices are typically expected to decline. However, due to the lack of homes for sale, prices continue to remain high as more homeowners, locked into lower interest rates, stay put rather than sell.
Homes in Rocklin, California, on December 6, 2022. Sales of existing homes have declined over the past six months as more homeowners stay put to avoid higher interest rates. (Photographer: David Paul Morris/Bloomberg via Getty Images / Getty Images)
The National Association of Realtors (NAR) reported this on Thursday The Property prices rose for the September saw its third straight month of decline, while existing home sales fell for the sixth straight month.
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“With low supply and rising mortgage rates, it’s no surprise that sales have fallen again,” said Robert Frick, corporate economist at Navy Federal Credit Union. “But the fact that they have reached lows not seen since 2010 after the housing bubble burst underscores that the housing crisis is getting worse.”