Results for: Mortgage rates

A new survey from the Federal Reserve Bank of New York reveals that US renters are increasingly pessimistic about their ability to ever own a home. Only about four in 10 renters believe they will be able to buy a home, the lowest level since the survey began a decade ago. This pessimism is particularly pronounced among younger renters, with half of those under age 50 not believing they will be able to buy a home. The survey also found that expectations of home-price growth have reaccelerated after falling last year. Renters expect home prices to rise at a 2.7% annualized rate over the next five years, roughly in line with inflation expectations.

Despite rising mortgage rates, strong demand and tight supply continue to push home values higher. The S&P CoreLogic Case-Shiller national home price index showed a 6.4% year-over-year increase in February, the fastest rate of growth since November 2022. The 10-city composite rose 8%, and the 20-city composite saw an annual gain of 7.3%. San Diego saw the biggest gain among the 20 cities in the index, with an 11.4% increase from February 2023. Chicago and Detroit both reported 8.9% annual increases, while Portland, Oregon, saw the smallest gain of just 2.2%. The Northeast region, which includes Boston, New York, and Washington, D.C., has been the best performing market for the past half year.

Mortgage rates have been rising steadily, with the average 30-year, fixed-rate mortgage reaching 7.17% for the week ending April 25th. Home buyers and sellers may not see any relief soon, as experts anticipate the Federal Reserve will hold rates steady in their meeting this week and only begin to trim borrowing costs in the second half of the year. However, volatility in rates is causing uncertainty in the housing market, as buyers may find they cannot afford the same property from one week to the next. Despite the higher rates, some buyers are adjusting and continuing to purchase homes, while the spring housing market is expected to pick up in late May and early June.

Former New York City real estate developer and author of ‘Early Detection’ Bruce Ratner joined ‘Squawk Box’ to share his insights on the real estate market, the state of commercial real estate, the mortgage rate outlook, and his personal crusade against cancer.

Mortgage rates in the US have risen to their highest point in five months, leading to a decline in home-purchase applications for the fifth time in the past six weeks. The 30-year fixed-rate mortgage climbed to 7.24%, marking the highest level since November. The spike in borrowing costs has created a disparity between the resale and new-home markets, with potential homebuyers delaying purchases until rates improve. As a result, listings have become limited, and prices have escalated. Homebuilders, on the other hand, have witnessed a surge in sales, driven by incentives and lower financing costs.

Mortgage demand is plummeting as interest rates continue to climb, leading to fears of a potential housing market crash. Mortgage applications dropped by 2.7% last week, driven by a jump in mortgage rates to 7.24%, the highest level since November. Applications to refinance fell even more dramatically, decreasing by 6% from the previous week. Purchase applications also saw a decrease of 1%, marking a significant 15% decline year-over-year. Despite the falling demand, home prices continue to rise, largely due to the limited inventory of available homes for sale. As a result, analysts believe that a housing market crash is unlikely in the near future.

Boston’s condominium market is facing challenges due to high mortgage rates and a limited supply of available units. According to a recent report, condominium transactions in the first quarter of 2023 saw a 20.5% decrease compared to the same period last year, with the total number of transactions dropping from 722 to 574. This trend is not exclusive to Boston, as total home sales nationwide have also experienced a decline of between 20% and 30%. The average condominium sales price, however, has increased by 6.1% in Boston, from $1,044,000 to $1,107,828. The number of months it would take agents to sell off the city’s inventory has also increased by 21.2%. Experts attribute these market conditions to a combination of factors, including the limited inventory, rising interest rates, and increased popularity of single-family homes. Prospective home buyers are advised to be prepared for potential bidding wars and to pay attention to neighborhood trends.

Adjustable-rate mortgage applications witnessed a 7.6% surge, indicating buyers’ efforts to secure lower borrowing costs amidst rising mortgage rates. However, ARM loans come with their inherent risks, as interest rates can fluctuate after an initial fixed period.

Canadians are becoming more cautious about spending as their mortgages come up for renewal at significantly higher interest rates. Retail sales declined by 0.1% in January, below the anticipated increase of 0.1%. Excluding automobiles, sales fell by 0.3%. The rapid growth of Canada’s population continues to inflate the numbers, with total sales still 2.2% lower than a year ago. Warm early-year weather may have also contributed to the sales, according to CIBC. The market currently anticipates a 49% likelihood of an interest rate reduction in June, indicating a close decision.

Homeowners with low mortgage rates face a dilemma: stay put to avoid higher interest rates or pay more to relocate. Experts call this the “golden handcuff effect,” where cheap mortgages keep homeowners in place. Despite rising property prices and interest rates, many with low-rate mortgages feel “locked in,” delaying their plans to move. A study by Realtor.com found that 82% of homeowners feel trapped by their low mortgage rates, while 1 in 7 without plans to sell cite low rates as the main reason for remaining in their homes.