Mortgage rates fall but only slightly as home prices continue rising
Mortgage interest rates fell to 6.99% this week. (iStock)
Mortgage interest rates fell this past week, but not by much. Rates for 30-year mortgages averaged just a hair under 7% at 6.99%, Freddie Mac reported in its weekly rates report.
Last week’s average for 30-year fixed-rate mortgages was just over 7%. Both last week’s and this week’s rates are higher than they were this time last year when rates averaged 6.71%.
"Mortgage rates retreated this week given incoming data showing slower growth," Freddie Mac Chief Economist Sam Khater said. "Rates are just shy of seven percent, and we expect them to modestly decline over the remainder of 2024. If a potential buyer is looking to buy a home this year, waiting for lower rates may result in small savings, but shopping around for the best rate remains tremendously beneficial."
Interest rates for 15-year fixed-rate mortgages are also trending down but remain solidly in the 6% range. This week, 15-year rates fell to 6.29%, down from 6.36% last week. These rates remain slightly elevated compared to last year when 15-year FRMs averaged 6.07%.
If you think you’re ready to shop around for a home loan, consider using Credible to help you easily compare interest rates from multiple lenders in minutes.
71% OF AMERICANS WAITING ON INTEREST RATE CUTS BEFORE HUNTING FOR HOMES: SURVEY
Home prices are still climbing
High home prices are still sticking around, particularly in certain areas of the country. Nationally, home prices jumped by 0.6% in May, according to a Realtor.com report.
Prices climbed more significantly in other parts of the country. The hottest real estate markets saw prices go up by 13.6%. This signifies that these markets are seeing more demand, despite now being a difficult time to buy. The Manchester-Nashua metro area ranked as one of the country’s hottest markets for the fifth month in a row.
Despite high housing prices, active listings were still up as the homebuying season heats up due to better weather. Active listings in general rose 35.2% year over year in May. The 20 hottest markets alone saw an inventory increase of 15.6%.
Demand in these areas is still high, creating a competitive market and driving prices up. After the Manchester-Nashua area, Hartford, Connecticut is the second-hottest market for buyers. Coming in third and fourth are two other New England areas, Springfield, Massachusetts and Concord, New Hampshire, Realtor.com found.
To see if you qualify for a mortgage based on your current credit score and salary, consider visiting Credible, where you can compare multiple mortgage lenders at once.
AMERICANS TYPICALLY SPEND ABOUT 24% OF THEIR INCOME ON MORTGAGE PAYMENTS
Housing affordability is a top issue for young voters
Housing affordability is on the mind of voters as the election grows closer. Generation Z is the most concerned, with 91% of them citing affordability as one of the more important issues in the election, Redfin recently reported.
Although Gen Zers consider housing more important than some other generations, all generations still want housing affordability addressed by the next U.S. president. At least 80% of all generations surveyed said housing is an important issue they want addressed. Every generation also considers housing affordability a more important issue than abortion rights or student loan debt. Gen Z also thought housing was more important to address than gun rights, foreign wars and preserving democracy, the report found.
"Housing affordability is a cornerstone of this year’s presidential election because even though the economy is fairly strong, unemployment is low and wages are rising, buying a home feels impossible for many Americans," Redfin Senior Economist Elijah de la Campa said.
"This is particularly the case for young people, who have seen the cost of starter homes increase twice as fast as incomes. Young people care about other political issues, like immigration and abortion rights, but they’re more likely to cite housing affordability as a factor in their vote because it directly impacts the roof over their head, their lifestyle and their ability to build wealth," de la Campa said.
You can explore your mortgage options in minutes by visiting Credible to compare rates and lenders.
RENTING IS SLIGHTLY CHEAPER THAN BUYING, PUSHING GEN Z TO RENT MORE OFTEN THAN BUY
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