Three major organizations representing the housing industry, The National Association of Home Builders, the Mortgage Bankers Association and the National Association of Realtors, all wrote to the Federal Reserve conveying “profound concern” over the Fed’s high interest rates. They fear that sky-high interest rates are not only slowing housing sales, but that it might lead to a recession in the market. This comes as the Fed is reportedly contemplating further rate hikes to combat inflation.
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Mortgage interest rates have once again hit a new high, approaching the highest they have been in 23 years. This is due in part to better than expected economic performance, which caused rates to spike. As interest rates climb towards eight percent, investors have become worried and homebuilder sentiment has dropped about the possibility of the market improving in the near future.
Continue reading “30-Year Fixed Interest Mortgage Rate Approaches 8%”
The second week of September saw a surprising increase in the rate of refinancing, with applications increasing by 13% week over week. This is despite the fact that interest rates have remained high, and in fact increased slightly over the same period. This peculiar trend may be a sign that some people expect interest rates to increase even further, with some trying to get ahead of the trend.
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Rent prices in Manhattan reached an all-time high in July and August, peaking at a median price close to $4,400 per month. This has led experts to believe that prices have reached the “affordability threshold” that will make it harder to raise rents much higher without pricing most people out of the market. However, renters may soon be able to breathe a sigh of relief as a wave of new apartment construction is set to bring rents down.
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Current homeowners have found themselves struggling to sell their homes thanks to what is known as the “golden handcuff” effect. This is due to high interest rates, which have discouraged homeowners from selling homes they purchased when interest rates were much lower. As a result, even homeowners who may want to sell their homes or refinance their existing mortgages will struggle to do so.
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Increasingly, insurers have joined those showing concern over the effects that climate change is having, and will have, on the real estate market. As climate change continues to worsen, severe weather will pose a great threat to many areas around the United States, particularly in coastal regions where storms are common, and arid regions where fires are a constant threat. Homebuyers will see the effects of this in increased insurance premiums as more homes come under threat from severe storms.
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