Oh, boy. Strapping In for a Wild Ride in the Housing Market!
Hold onto your house keys, folks! This ain’t your usual merry-go-around. The dynamic duo of sky-high mortgage rates and some really (and I mean *really*) pricey homes have thrust the cost of homebuying into the stratosphere. Yes, you heard it right – it’s an all-time high. Feels like we’re stuck on a rollercoaster that only knows up, doesn’t it?
Redfin, our friendly neighbourhood real estate gurus, tells us the standard monthly bite out of the typical new homebuyer’s wallet now stands at a whopping $2,775. Yup, that’s a new Everest – a hefty 11% step-up from the same time last year. (Source: Redfin) So, who’s the usual suspect here?
Cue in the Mortgage Rates…
See, mortgage rates decided to throw a party and everyone was invited – except our bank accounts. Higher-than-normal mortgage rates are having a ball, linked arm-in-arm with the Federal Reserve’s benchmark rates and rumours about their future movements. What’s cooking in the kitchen? Last week’s spicier-than-expected inflation data. What does that mean for us? Not so good – it’s pushed any hopes of Fed interest cuts further back in the line.
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Who could have better fortunes? Sitting pretty in that chair over there’s the Bank of America, along with some other heavy hitters, seeing just one measly interest rate cut for 2024, postponed till the last month of December. What a bummer! And just when we thought it couldn’t get grimmer, here comes Fed Chair Jerome Powell dropping the bomb that it’s “likely to take longer” than planned for a rate reduction. No, just no!
Ouch! That’s not the news our prospective home buyers wanted for their morning coffee. Sadly, they had to sit through nearly a quarter-point hike in the mortgage rates. Rough week or what?
As Prices climb, Mortgage Rates are Saying ‘Hold my Beer’
Freddie Mac, hoping to be the life of the party, reveals that the average rate for a 30-year fixed mortgage reached 7.10% for last week – the highest average this far in 2024! (You’re thinking it can’t go higher, right? Well, Redfin’s data begs to differ. They place that average at an even steeper 7.4%.)
Even against the backdrop of elevated mortgage rates, homes just keep getting more expensive like it’s going out of style. Redfin clocked the average four-week home sale price at a staggering $380,250. That’s a 5% uplift from the same period last year.
Oh, and our buddies over at the National Association of Realtors (NAR) report that existing home sales prices are nearly 4.8% fatter than last year. Despite an almost 5% bump in the volume of homes from February to March, NAR insists the price surge remains unscathed. Buckle up, folks, 2024 just got a lot bumpier!
A Spot of Optimism Among the Clouds:
Is it all doom and gloom? Not exactly. Housing expert Orphe Divounguy reckons that as more homes enter the market, and demand cools off a bit, there might be some price drops on the horizon. A little good news goes a long way these days, doesn’t it?
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Want some more titbits deep-dive into mortgages and housing? Check these out:
- 8 Best Mortgage Lenders of April 2024
- Housing Market Predictions: What Buyers and Sellers Can Expect This Spring
- 9 Best Home Equity Loans of April 2024
Picture this – you, moving into your dream home that you’ve always fantasised about! Believe me, with Rocket Mortgage (NMLS #3030), that dream is closer than you think.
Man, what a topsy-turvy world housing market is, huh? Fasten your seatbelts, folks. We’re in for one helluva ride! But hey, we’ve got you covered with all the info, because what’s life without a little chaos?