New home sales in the US increased by 4.4% in July, outperforming expectations and highlighting the continued demand for new construction due to a shortage of existing affordable homes. Despite rising mortgage rates, buyers are turning to new homes, causing a decline in sales in the resale market. However, as mortgage rates continue to rise, builder sentiment may be negatively impacted and prices may need to be adjusted to attract buyers.
The surge in mortgage rates has caused housing affordability to reach the lowest level since 2000, leading to a slow fall in the housing market and a potential dip in home prices, although the current market differs from the conditions that preceded the 2008 crash, with low housing inventory and a lack of risky mortgage products, making mortgage rates the key lever to improve affordability.
Mortgage rates topping 7% have led to a significant drop in mortgage applications for home purchases, with last week seeing the smallest volume in 28 years. The increase in rates, driven by concerns of high inflation, has priced out many potential buyers and contributed to low housing supply and high home prices. As a result, sales of previously owned homes have declined, and homeowners are reluctant to sell their properties due to the higher rates. Some buyers are turning to adjustable-rate mortgages to manage the increased costs.
US mortgage applications for home purchases fell to their lowest level in 28 years, while refinancing also declined, as mortgage rates reached a 23-year high, according to data from the Mortgage Bankers Association.
Sales of existing homes have declined due to the rise in mortgage rates, but the demand for new homes is increasing as buyers are hesitant to sell their current homes with low-interest mortgages.
The average mortgage rate in the U.S. has surpassed 7% for the first time in over two decades, leaving homeowners feeling trapped by their low interest rates.
Homebuyers' purchasing power has been negatively impacted by rising mortgage rates, which averaged 7.2% in August, the highest level since 2001, resulting in a decline in existing home sales and a shift towards new-construction homes.
Mortgage rates in the US are at a 22-year high, impacting the already tight housing market due to high prices, and economists predict that rates will remain elevated for a few more months before starting to come down, but are expected to settle well above the rates seen during the early stages of the pandemic.
Prospective home buyers can still secure a lower mortgage rate in today's market by improving their credit score, shopping around for lenders, considering an adjustable-rate mortgage, buying mortgage points, locking in a rate, and making a large down payment.
Buyers of newly built homes are enjoying lower mortgage rates, as home builders are allocating a portion of the sale proceeds to permanently buy down the rates, leading to higher new home sales.
Mortgage rates have increased recently due to inflation and the Federal Reserve's interest rate hikes, but experts predict rates will remain in the 6% to 7% range for now; homebuyers should focus on improving their credit scores and comparing lenders to get the best deal.
The average rate on 30-year fixed-rate mortgages decreased to its lowest point in three weeks, with most loan types experiencing a double-digit decline.
The housing market is entering its slow season and home sales may be impacted by high mortgage rates, but home builder stocks could remain strong.
Average 30-year mortgage rates are still elevated at 6.94% in August, but they are expected to come down by the end of the year; however, a significant drop that will boost homebuying demand is not likely until 2024 or 2025, but there are advantages to buying a home even when rates are high, such as less competition.
The high average rate for 30-year fixed-rate mortgages is deterring homeowners from selling, as they would face higher rates for a new mortgage and increased monthly payments, resulting in a shortage of homes for sale.
Mortgage rates for most types remained steady or experienced minimal changes, with the 30-year mortgage average dropping slightly, but still above its recent low, indicating that it's still a good idea to compare rates when seeking a mortgage.
Mortgage rates have risen significantly, but while higher-end homes have experienced price declines, lower-end homes have remained relatively unaffected, leading to a divergence in the housing market.
The average 30-year fixed mortgage rate has jumped to 7.19%, the second-highest rate since November, signaling a decline in U.S. housing affordability; experts predict varying future rates, with some expecting a decline and others projecting rates to remain relatively high.
Rates on 30-year mortgages have decreased, reaching their lowest point since September 1st, after dropping nearly a quarter percentage point from their 22-year high recorded last week.
U.S. homebuilders are feeling pessimistic about their business due to high mortgage rates, leading to a decrease in builder confidence and an increase in price cuts.
The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) fell to 45 in September, reflecting a decline in builder sentiment due to rising mortgage rates, increasing costs for construction materials and labor, and shortages of construction workers and buildable lots.
US homebuilders are losing confidence in the housing market as mortgage rates remain high, causing a decline in buyer purchasing power and a negative outlook for the industry.
US home building declined in August, with housing starts dropping to the lowest level since June 2020 due to elevated mortgage rates and limited inventory, despite an increase in building permits.
U.S. homebuilding hit a three-year low in August due to a decrease in demand caused by higher mortgage rates, while permits for future construction rose, suggesting support from limited housing inventory.
The U.S. housing market is facing a shortage of homes, which is driving up prices and making it difficult for buyers to find affordable options, and the problem may get worse as builders become less confident and hesitant to construct new homes due to high mortgage rates and construction costs.
New home construction in the U.S. has plummeted to a three-year low due to high mortgage rates, increased labor costs, and the rising price of building homes, leading to a significant decline in both single-family and multifamily starts.
US mortgage rates remain above 7% for the sixth consecutive week as inflation pressures persist, leading to cooling housing demand and a decline in builder sentiment, according to Freddie Mac's chief economist.
Sales of previously owned homes fell 0.7% in August from July, with high mortgage rates and tight supply impacting potential buyers.
