Average rate for 30-year fixed loans continue to sit above 7%
Mortgage rates in the US have risen for the fourth consecutive week, reaching an average of 7.17% for 30-year fixed loans.
As the spring buying season kicks into gear, prospective homeowners are facing increased financial burdens due to the steady rise in borrowing costs since the start of the year, compounded by a persistent scarcity of available properties.
In response, homebuilders are increasing construction efforts and enticing buyers with more favorable financing options and other incentives.
According to recent government data, sales of new homes surged 8.8% in March from the previous month, marking the highest rate since September.
During the same period, the National Association of Realtors (NAR) also observed a rise in pending sales of existing homes.
Last week, the average rate for a 30-year fixed loan sat at 7.1%, according to Freddie Mac.
The Federal Reserve is set to convene next week, but recent comments made by Federal Reserve Bank of Cleveland President Loretta Mester have suggested that the benchmark interest rate will continue to hold steady.
“I still am expecting inflation to come down but I do think that we need to be watching and gathering more information before we take any action,” Mester said earlier this month.
As the Fed holds steady on rates, potential homebuyers are faced with the decision of accepting higher ongoing costs or postponing their plans to buy. But an economist at Realtor.com said there may be a silver lining for those that want to push through with their plans.
“Despite the increased mortgage rates leading to higher costs, it could also suggest a less competitive market where opportunities may exist for some homebuyers,” said Jiayi Xu, as cited by Bloomberg.
“For instance, buyers may find that sellers are more open to negotiation compared to the previous year.”
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