Pam Ryan Anderson, Real Estate Broker and Owner of Ryan Realty since 1994 wants you to be informed of the facts affecting the real estate market so that you can make correct decisions about your future. For instance, I had a man call me this week to sell his home. When I asked him why he wanted to sell, he responded: “My plan is that I am going to sell high and buy low!” Well, in our current market, that is just impossible. Once I explained the reality to him that he would be getting much less home for much more money, he finally admitted that his wife was right and had been telling him the same thing!
Pam can be reached at Pam@ryanrealty.org
By Matt Ott
The rate for a 30-year, fixed-rate mortgage jumped over half a percentage point in one week – from an average of 5.23% seven days ago to this week’s 5.78%.
WASHINGTON (AP) – Average long-term U.S. mortgage rates made their biggest one-week jump in 35 years, one day after the Federal Reserve raised its key rate by three-quarters of a point in a bid to tame high inflation.
Mortgage buyer Freddie Mac reported Thursday that the 30-year rate climbed from 5.23% last week to 5.78% this week, the highest it’s been since November of 2008 during the housing crisis.
Wednesday’s rate hike by the Fed was its biggest in a single action since 1994.
The brisk jump in rates, along with a sharp increase in home prices, has been pushing potential homebuyers out of the market. Mortgage applications are down more than 15% from last year and refinancing is down more than 70%, according to the Mortgage Bankers Association.
Those figures are likely to worsen with more Fed rate increases a near certainty.
The Fed’s unusually large rate hike came after data released last week showed U.S. inflation rose last month to a four-decade high of 8.6%. The Fed’s benchmark short-term rate, which affects many consumer and business loans, will now be pegged to a range of 1.5% to 1.75% – and Fed policymakers forecast a doubling of that range by year’s end.
Higher borrowing rates appear to be slowing the housing market, a crucial part of the economy. Sales of previously occupied U.S. homes slowed for the third consecutive month in April as mortgage rates surged, driving up borrowing costs for would-be buyers as home prices soared.
On Tuesday, the online real estate broker Redfin, under pressure from the cooling housing market, said that it was laying off 8% of its workers.
Homeownership has become increasingly difficult lately, especially for first-time buyers. Besides staggering inflation, rising mortgage rates and soaring home prices, the supply of homes for sale continues to be scarce.
The average rate on 15-year, fixed-rate mortgages, popular among those refinancing their homes, rose to 4.81% from 4.38% last week. A year ago, the rate was 2.24%.
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