![]() Gabriella is a personal finance reporter at Yahoo Finance. If at any point in the last six months talk of the Federal Reserve. Higher benchmark rates mean a higher cost of borrowing money. Two important benchmarks are the federal funds rate set by the Federal Reserve and the prime rate set by banks. Now rates are around 6%,'" said Sean Dycus, a real estate agent at Main Street Properties in Charleston, S.C. A benchmark interest rate is an interest rate that determines the amount of other interest rates. "You'll be selling a house thinking, 'oh my god, we had interest rates at 2%. That has shown up in refinance activity, which is down 68% from a year ago, according to MBA. According to Redfin, 85% of homeowners had a rate below 6% as of September 2022, which makes it unlikely they’d be willing to give that up anytime soon. At least 44% of home sellers thought it was a bad time to sell in February, up from 39% the month prior. Higher rates also impact homeowners who would like to refinance or trade up. “Mortgage rates remain as elevated as they have been.” “Affordability remains an issue, and will as long as home prices remain as supported as they have been – softening of late, but still above already-pricey year ago levels,” Keith Gumbinger, vice president of HSH.com, told Yahoo Finance. “This year it's because of high mortgage rates.”įor instance, the buyer of a median-priced home with a 6.65% rate – near last week's rate – would face a monthly payment that’s 49% higher than last year, according to. Overall affordability is worse and keeps getting worse every year,” Fairweather told Yahoo Finance. Fannie Mae’s measure on housing sentiment found that both homebuyers and sellers blamed affordability concerns for the lull in sales activity this spring. Mortgage rates need to fall further to revive housing confidence, according to Daryl Fairweather, chief economist at Redfin, which was still near a historic low in March. Ebenhack, AP) ‘Overall affordability is worse ’ĭespite the few signs of life in the last few weeks, purchase activity remains 36% off from the same week last year, according to MBA. ![]() A nearly yearlong homes sales slump and a pullback in prices have done little to make homeownership more affordable.(Credit: Phelan M. A real estate sign is viewed outside of a recently sold home, Tuesday, Feb.
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