Fed signaled it might raise its benchmark rate before year's end, which may catapult mortgage rates even higher.
from Bankrate found that one-third of respondents who aspire to buy a home say high mortgage rates are holding them back. But in past decades, homebuyers faced even steeper loan rates.
"High rates are challenging for homebuyers, but it's worth noting that Americans bought homes before the recent era of super-low rates," said Jeff Ostrowski, a Bankrate analyst."In one oft-cited example, mortgage rates went as high as 18% in the early 1980s, and buyers still found ways to get deals done."If the Fed raises rates again, mortgage lenders will likely respond by either raising their rates or keeping them closer to today's roughly 7.2%, economists said.
The Fed's regime of interest rate hikes began in March 2022 as a way to cool the hottest inflation in four decades, as consumers and businesses tend to cut back on buying homes and other purchases when borrowing costs are higher. "If the 30-year-fixed mortgage rate can hold at a high mark of 7.2%, and the 10-year yield holds at 4.2%, then this would be the high for mortgage rates before retreating," said Lawrence Yun, chief economist at the National Association of Realtors ."If it breaks this line and easily goes above 7.2%, then the mortgage rate could reach 8%."
An average 8% on home loans would be sour news for homebuyers, many of whom already faced a challenging market this summer with fewer homes available and higher asking prices. The national median home price hit $402,600 in July, up from $359,000 at the start of 2023, and the typical mortgage on a single-family home is now $2,051 compared with $1,837 a year ago, Yun said 8% mortgage rates would bring the housing market to a halt and may even sink asking prices.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
EUR/USD dips below 1.0900 as Fed’s minutes show split views amongst Fed officialsEUR/USD dropped below 1.0900 for the second straight day, as the latest Federal Reserve (Fed) monetary policy minutes began to show policymakers are s
Read more »
Mortgage rates climb to highest level since 2002Mortgage rates are now the highest they have been in more than two decades, thanks to the Federal Reserve's efforts to counteract the historic bout of inflation, hurting affordability and threatening the market.
Read more »
What 7% Mortgage Rates Mean for Home BuyersBuyers should focus on what they can control rather than try to predict mortgage rates.
Read more »
Mortgage rates hit 22-year high, Bankrate saysThe average rate on 30-year mortgages climbed to 7.31% this week, according to Bankrate's weekly national survey of large lenders.
Read more »
Weekly mortgage demand drops again, as interest rates match a 22-year highLast year the 30-year fixed was 5.45%, and in 2021, it was in the 3% range, showing just how far costs have risen since the Federal Reserve began raising rates.
Read more »
Mortgage rates surge to 21-year highThe 30-year fixed-rate mortgage averaged 7.09% over the week ending on Thursday, Freddie Mac data shows.
Read more »