Which cities are seeing the biggest growth in home prices?
Cincinnati is No.1 when it comes to increase in list price this June compared to the same month a year ago.LEARN MORE
Some potential home buyers have decided to rent for another year rather than purchase at current higher rates.
When it comes to home sales, could higher mortgage rates finally slow down price inflation?
Mortgage rates climbed this week after the Fed raised benchmark interest rates at its policy meeting. Meanwhile, the median home list price in the United States declined slightly in June, the first time since 2017 according to Realtor.com.
The rising interest rates affect buyers' purchasing power, and can make them hesitant to take on a long term loan, said Carolyn Morganbesser of Affinity Federal Credit Union.
“The higher the rate the higher the mortgage payment. For first-time home buyers this can and does affect how much home they can afford,” Morganbesser said.
Many potential home buyers have decided to rent for another year rather than purchase at these higher rates, Morganbesser said.
But some buyers are out in the marketplace seeking to buy a home as prices have cooled a bit, and may look to refinance down the road, said Kyla Linn, real estate agent at Compass Real Estate in Houston, Texas.
In Houston, price inflation is no longer as prevalent as it was during years when interest rates were low, but it's also a steady market where in desirable areas prices continue to increase, she said.
Low inventory has been a pervasive issue as home owners have been unwilling to sell and trade a low rate mortgage for a much higher rate.
About 70% of the homes that are listed by Linn in inner-city Houston receive multiple offers, she said. All markets are local and Houston’s economy is buoyed by oil and energy as well as medical, Linn added.
Mortgage interest rates jumped to 6.81% for a 30-year fixed-rate loan for the week ending July 27, according to Freddie Mac, up from last week’s average rate of 6.78%. The median list price of a home in June was $445,000, down 0.9%, a small sign of relief for buyers since Realtor.com began tracking in 2017.
Interest rates have more than doubled in the past two years as the Fed raised its benchmark rate in an attempt to curb inflation for the 11th time out of the last 12 policy meetings. Mortgage rates have been hovering between 6% and 7% for the past few months. It’s been in an upward trajectory since March of 2022.
The payment on a $400,000 loan with a July, 2021, average rate of 3.1% is $1,708 a month on a 30- year mortgage; compared to $2,626 at 6.87%.
Reacting to the July interest rate hike, Lawrence Yun, chief economist at National Association of Realtors, warns of the severe impact on the housing market.
“Because of higher interest rates, home sales have fallen, businesses are cutting back on investments, and community banks are under stress,” Yun said in a statement.
High interest rates and higher home prices are not deterring Hispanic buyers as homeownership has grown for eight straight years.
"There are more homeless people in Sacramento than San Francisco,” the lawsuit stated. “Our community is at a breaking point."
Millions of Americans face challenges in affording home insurance, a problem that is anticipated to worsen, a new report finds.
The office, created by executive order, will implement executive actions that have been laid out to reduce gun violence.
The 23-year-old Black man died after being put in a neck hold by officers and injected by paramedics with a powerful sedative.
Elon Musk says his brain implant device company Neuralink is ready for human trials, but a report says test monkeys died in the animal trials.