Flo F.’s Post

What’s Keeping Rates High? The delay in lowering interest rates is significantly impacting the economy and housing. Mortgage rates are tied to interest rates. #TheAbedGroupFlorida #BrokerWadeFlorida #HomeMortgageInterestRates #FloridaHousingAffordabilty #FederalReserve #CentralBankUSA

It’s been two years since the average 30-year fixed-rate mortgage topped 5 percent for the first time since 2011, and more than a year and a half since mortgage rates barreled past 6 percent for the first time since 2008. And now, mortgage rates have been stuck above 7 percent — a more than two-decade high — for seven straight weeks.

The gap between new mortgage rates (7.1%) and the average outstanding (3.8%) is the highest since the 1980s. Interest rates impact mortgage rates.

The gap between new mortgage rates (7.1%) and the average outstanding (3.8%) is the highest since the 1980s. Interest rates impact mortgage rates.

In addition to the buyer upside of affordability and lower costs to get into home ownership, we believe the lower interest rate environment will give sellers the ability to list and move as the difference between their existing mortgage and a new mortgage is so much less than a year ago. That has been one of the big contributors to lack of housing supply.

The mortgage market may have already largely built in the impending rate cut, as we’ve seen mortgage rates come down over the past few weeks. 

The Federal Reserve left interest rates at a 23-year high for the seventh consecutive meeting today. How does this effect #homebuyers? Since February, the key home financing rate has been holding above 7 percent — representing at least a 41% hit to homebuyer affordability alone. That’s because financing $500,000 on a 30-year fixed-rate #mortgage would’ve cost a borrower roughly $2,371 a month in principal and interest when rates hit a record low of 2.93% in Bankrate’s national survey of lenders. Today, that monthly payment has skyrocketed to $3,353, according to Bankrate’s mortgage calculator. That's $982/Month more! Mortgage rates have also been stuck above 6 percent since September 2022, Bankrate data shows. These high mortgage rates are only one aspect plaguing prospective buyers. Low inventory is also keeping a floor on how low prices can go. A Bankrate analysis showed that Americans must earn at least $100,000 annually to afford a median-priced home in 22 states and the District of Columbia, and in many states, it's even more! Want to know more about the impact of today's rate decision? Read more here: https://lnkd.in/gDMXeQUX #interestrates #housingmarket #realestate

Prospective homebuyers and housing industry professionals are eagerly awaiting the Fed announcement tomorrow about just how much it will lower its benchmark rate, which will affect mortgage rates. Rumor is it won't be substantial, and we can expect several more rate cuts into 2025. While lower mortgage rates mean more affordability for homebuyers, with housing inventory still below pre-pandemic levels, it could also bring more homebuyers back on the market, which could result in the price being bid up as they compete for a home. My advice? Buy a home when you are financially ready and don't chase the rate. If you're planning to stay put for at least 7-8 years and you are in a good financial situation, stop helping your landlord to build his/her home equity, and start building your own equity. https://lnkd.in/gkev_EjB

Some market thoughts: Quinn and I have been projecting rate cuts this year and they appear to be on the near horizon. With housing supply at a five-year high in Atlanta, and days on market increasing, we're starting to see prices are pull back in some areas. Sellers still hold record levels of equity, but conditions for Buyers are rapidly improving. Through the end of this year, and into next year, lower mortgage rates will continue to balance the market and create some promising opportunities for homebuyers.

Determining the precise factors that can reduce inflation rates is complex, as it typically involves multiple variables. While high interest rates are a significant factor, the Federal Reserve has recognized that raising interest rates alone may not be sufficient to curb inflation. Other variables must also be considered. Fortunately, many individuals locked in fixed mortgage rates during the COVID-19 pandemic, enabling them to repay their mortgages at lower rates, which has provided some financial stability