The U.S. real estate market is about to see a shift in the coming months, according to an industry expert.
Mortgage rates declined for the first time in weeks, though they are still hovering near 7%, mortgage buyer Freddie Mac said Thursday.
Freddie Mac’s latest Primary Mortgage Market Survey, released Thursday, showed that the average rate on the benchmark 30-year fixed mortgage fell to 6.84% from last week’s reading of 6.85%.
The average rate on a 30-year loan was 6.95% a year ago.
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“Mortgage rates have moved within a narrow range for the past few months and this week is no different,” said Sam Khater, Freddie Mac’s chief economist. “Rate stability, improving inventory and slower house price growth are an encouraging combination as we celebrate National Homeownership Month.”
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The average rate on the 15-year fixed mortgage slipped to 5.97% from last week’s reading of 5.99%. One year ago, the rate on the 15-year fixed note averaged 6.17%.
A “for sale” sign is posted outside a residential home in the Queen Anne neighborhood of Seattle. (Reuters/Karen Ducey / Reuters)
While the average rate on a 30-year note still hovers around 7%, U.S. home listing prices hit an all-time high, signaling a potential shift toward a buyers’ market, according to industry experts.
In total, the value of homes in the U.S. rose 20.3% from a year ago, reaching a record $698 billion, according to a recent report from the real estate firm Redfin. The increase was driven by a combination of growing inventory, slowing demand and rising home-sale prices.
The average rate on a 30-year loan was 6.95% a year ago. (Tierney L. Cross/Bloomberg via Getty Images / Getty Images)
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With the number of sellers outpacing buyers, Redfin chief economist Daryl Fairweather told FOX Business that the market is poised to shift over the next couple of months.
“All these homes are listed for really high prices, which is why they are sitting on the market. But buyers can’t afford at these high prices, which is why they’re backing off of the market,” Fairweather said, adding that mortgage rates, insurance costs and property taxes are high. “Buyers just aren’t biting at these prices.”