According to data from Freddie Mac, mortgage rates reached a 5 month high this past week (Article from Thursday, April 25th).
Pending home sales in March were reportedly the best they had performed in a year while existing home sales plunged. Expected inflation in the coming months has been extremely high which has increased bonds yields. The 30-ytear mortgage rose to 7% the week of April 25th and economists are predicting a decline in rates in the coming months. Due to this pending home sales will likely decrease in the coming months as well.
Not only have mortgage rates shot up, but affordability of homes is becoming less and less. There are less available homes on the market as well which is contributing to the higher home prices. According to the author of this CNN article, the median price of a U.S. home was $393,500 in March which is up 4.8% from last year.
Knowing all of this-it was interesting to read in this article that demand has still remained steady in the housing market. I wonder for how long it will stay like this before demand decreases and consumers can no longer afford high mortgage rates and high home prices. Single family homes are becoming less prevalent and construction is less frequent for this style of housing; it fell drastically in March.
https://www.cnn.com/2024/04/25/economy/us-pending-home-sales-march/index.html
What do you think could be done to address the challenges of rising mortgage rates and home prices to ensure continued stability in the housing market?
ReplyDeleteIt's fascinating to see the resilience of the housing market despite the challenges posed by rising mortgage rates and decreasing affordability. However, with pending home sales likely to decrease in the coming months and the diminishing availability of single-family homes, how do you think this will impact the overall trends of the housing market?
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