America’s housing crisis is set to become a problem as mortgage rates are expected to hit new multi-decade highs, experts warn.
Bruce McNeilage, CEO and co-founder of Kinloch Partners, a Nashville-based real estate firm, shares this view. In a recent interview, McNeilage predicted that 30-year mortgage rates could reach 8%, a level not seen since the early 2000s “I say 8%,” McNeilage said. “There is not enough supply. The law of supply and demand works. Home values and prices just don’t go down. “
While many buyers are waiting for interest rates to fall, McNeilage believes it is a losing strategy. “If someone is waiting to buy a house and they get a mortgage now, I would recommend that they do it,” he said.
Her advice echoes that of Redfin’s Connie Durnal, who recently warned that interest rates aren’t going down anytime soon. “If you can afford it and find a home you love, buy now.” There is no guarantee that rates will come down anytime soon,” Durnal said.
According to Freddie Mac, average 30-year mortgage rates peaked at 7.79% last October, the highest level in more than two decades. By the end of 2023, mortgage rates had fallen to mid-6%, but have accelerated again since then.
Experts attribute this increase to rebounding inflation and the Federal Reserve’s uncertainty about lowering rates.
A series of higher-than-expected inflation reports has put economists on high alert, expecting that the Fed may be unwilling to lower the price of money. In fact, Philip Jefferson, the Fed’s vice chairman, recently said that rising inflation could force the central bank to keep rates higher for a longer period of time.
It’s not just inflation data that influences the Fed’s decisions. A strong job market “means that mortgage rates probably won’t go down much at this point,” said Michael Fratantoni, chief economist at the Mortgage Bankers Association (MBA).
Investors are almost 100% confident that the Fed will keep rates at 5.5% at its next meeting, which ends on May 1st. According to the CME Group’s FedWatch tool, the rate cut remains below 50% through September.
2024-04-26 14:43:31
#Mortgages
