DeBianchi Real Estate President and realtor Sam DeBianchi gives advice to millennials who are struggling to buy homes on Making Money.
Mortgage rates dropped this week to their lowest level in eight months in a welcome occurrence for potential homebuyers who have watched rates climb for the past few weeks.
Freddie Mac’s latest Primary Mortgage Market Survey released Thursday showed that the average rate for the benchmark 30-year fixed mortgage decreased to 6.60% this week, a decline from 6.62% last week but still up from 6.33% a year ago.
A property for sale on Elm Avenue in Toronto, Ontario, on March 13, 2023. (Lance McMillan/Toronto Star via / Getty Images)
The rate on the 15-year fixed mortgage edged lower for a third straight reading, averaging 5.76% after coming in last week at 5.87%. One year ago, the rate on the 15-year fixed note averaged 5.28%.
Sam Khater, Freddie Mac’s chief economist, said these are the lowest rates since May of last year.
EMPTY NESTERS NOW OWN TWICE AS MANY LARGE HOMES AS MILLENNIALS WITH KIDS AS FAMILIES ARE EDGED OUT
“This is an encouraging development for the housing market and in particular first-time homebuyers who are sensitive to changes in housing affordability,” Khater said in a statement. “However, as purchase demand continues to thaw, it will put more pressure on already depleted inventory for sale.”
The U.S. has seen a persistent shortage of homes on the market as many homeowners are opting not to sell amid high prices and interest rates. (Frederic J. Brown/AFP via / Getty Images)
A dearth of existing homes for sale is keeping prices elevated, but a sharp decline in mortgage rates since the fall has spurred an uptick in demand, particularly for new homes. However, the Commerce Department reported Thursday there was a substantial drop in single-family home construction in December, a surprise following four months of increases in housing starts.
HOMEBUILDER SENTIMENT SURGES AMID SHARP DROP IN MORTGAGE RATES
At the same time, building permits – a leading indicator of future construction – rose last month, signaling builders expect the housing market to improve this year, according to LPL Financial chief economist Jeffrey Roach.
Homes under construction in Loudonville, New York, on Nov. 8, 2023. Homebuyers are looking to new construction amid a shortage of existing homes for sale. (Angus Mordant/Bloomberg via / Getty Images)
“Falling mortgage rates should jump-start the demand for housing in the coming months,” Roach said. “Despite the month-over-month decline in December starts, construction activity remains close to pre-pandemic levels.”
GET FOX BUSINESS ON THE GO BY CLICKING HERE
“The low supply of existing homes on the market is nudging potential buyers to new construction,” he added. “Investors should expect opportunities within the homebuilder sector throughout this year.”
FOX Business’ Megan Henney contributed to this report.
Credit: Source link
