After almost reaching its all-time high of 8%, By the end of this year the mortgage rate began to decline For the latest report from the Mortgage Bankers Association, it stands at 6.8%, one of the lowest levels since June.
In the midst of a real estate market completely cornered by home prices, lack of inventory and high mortgage rates, This last figure provides a respite to the sector that this year has also been pressured by high interest rates. by the Federal Reserve to control inflation.
For Nancy Vanden Houten, chief US economist at Oxford Economics, “the supply of homes for sale remains tight. lLower mortgage rates may leave some sellers out of business, although the majority of homeowners with mortgages still have rates well below current market rates,” he said in a report.
According to the report of the National Association of Realtors for the month of November sales of existing homes increased by 0.8% at an annual rate adjusted of 3.8 million and sales fell 7.3% compared to the previous year.
In this regard, Lawrence Yun, chief economist of the NAR, expressed that “The latest weakness in existing home sales still reflects the bidding process of buyers for most of October, when mortgage rates were at their highest level in two decades before the actual closings in November,” he said.
Home prices continued to rise this year renting being one of the most viable options for buyers who remained distant from the real estate market.
According to Redfin analysis An American family would need to have an annual income of more than $100,000. to pay for a house with an average price of $40,000, more than the average household earns.
In this sense, Daryl Fairweather, chief economist at Redfin, pointed out that for next year, a slightly larger drop of 1.7% is expected in home prices In addition, he anticipates that it can remain stable for a few months.
Finally, Thomas Ryan, real estate economist at Capital Economics, indicated that “looking into December, we anticipate that the recent drop in borrowing costs and the rebound in mortgage activity will translate into a greater recovery in sales volumes. In 2024, we anticipate further declines in mortgage rateswhich will attract more buyers and sellers to the market,” he said.
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2023-12-21 19:23:38
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