The average US homeowner’s monthly mortgage payment has increased by 15 percent, or $337, according to a shocking new report from Redfin.
The report goes on to say that rising mortgage rates, at around 7 percent, are the highest since July 2007, just before the crash that triggered the Great Recession.
This causes potential homebuyers to get cold feet and decide not to buy in the current market.
Additionally, homes are staying on the market longer, causing homeowner prices to drop to their highest levels since 2015.
Not since January have pending sales been at their current low levels, while the number of homes being sold at below market prices is at its highest level since 2020. While new registrations are down 14 percent from the same point in 2021.
Redfin’s Jason Aleem is quoted in the report as saying, “It is imperative that home sellers respond quickly and aggressively when the market turns.”
He continued: “That means you need to adjust your prices immediately if you want to be competitive and get offers from a smaller pool of qualified homebuyers. If your home isn’t the ‘Belle of the Ball’ in your neighborhood, you need to drop the price to sell it.’
According to the Redfin report, rising mortgage rates of around seven percent are the highest since July 2007, just before the crash that triggered the Great Recession
One of Redfin’s key indicators of the decline in potential buyers is the fact that “home for sale” as a search term on Google this September is down 33 percent compared to the same period last year
New home listings are down 14 percent from a year ago
One of Redfin’s key indicators of the decline in potential buyers is the fact that “home for sale” as a search term on Google this September is down 33 percent compared to the same period last year.
Other factors such as B. Requests for home inspections are declining along with applications for mortgage purchases.
At the time of writing, the median home price in the United States is $369,250, a seven percent increase from a year ago.
Selling prices in crime-ridden San Francisco are down 4 percent, while in New Orleans they’re down 11 percent.
Mortgage buyer Freddie Mac reported Thursday that the average of the top 30-year rates rose to 6.70 percent from 6.29 percent last week. In contrast, the rate a year ago was 3.01 percent.
The average interest rate on 15-year fixed-rate mortgages, popular with those looking to refinance their homes, rose to 5.96 percent from 5.44 percent last week.
Fast-rising mortgage rates threaten to sideline even more homebuyers after more than doubling in 2022. Last year, potential homebuyers expected interest rates to be well below 3 percent.
Freddie Mac found that a borrower who settled at the high end of the weekly rate range over the past year would pay several hundred dollars more for a typical mortgage amount than a borrower who settled at the lower end of the range.
Seattle’s housing market is slowing faster than any other nation, a new study has found — as cash-strapped buyers are increasingly reluctant to buy a home
Last week, the Federal Reserve raised its benchmark interest rate by another three-quarters point in a bid to contain the economy, its fifth hike this year and the third straight 0.75 percentage point increase.
Nowhere is the impact of Fed action more evident than in the real estate sector. Existing home sales have fallen for the seventh straight month as rising borrowing costs put homes out of reach for more people.
The government reported on Thursday that the US economy, which was reeling from rising consumer prices and rising interest rates, shrank at an annual rate of 0.6% from April to June. That was unchanged from the previous estimate for the second quarter.
Fed officials are forecasting that they will raise interest rates further to around 4.4% by the end of the year, a full point higher than forecast in June. And they expect to raise the rate back to around 4.6% next year. That would be the highest level since 2007.
By raising lending rates, the Fed is making it more expensive to get a mortgage, car loan, or business loan. Consumers and businesses are then likely to borrow and spend less, cooling the economy and slowing inflation.
Mortgage rates do not necessarily reflect Fed rate hikes, but tend to follow the yield on the 10-year Treasury note. This is influenced by a variety of factors, including investor expectations of future inflation and global demand for US Treasuries.