Current homebuyers feel pressured Real estate market It’s suffering more as the Federal Reserve’s efforts to curb burning inflation have pushed mortgage rates up to 6%.
According to Freddie Mac, the average interest rate on 30-year fixed mortgages is 5.81%, the highest level since November 2008, up 3.02% from a year ago. Last week, average 30-year fixed-rate mortgages reached 5.78%, the largest weekly increase since 1987.
Meanwhile, the average interest rates for 15-year fixed-rate mortgages and 5-year Treasury-indexed hybrid floating-rate mortgages were 4.92% and 4.4%, respectively.
On Thursday, the Mortgage Banking Association reported that the median mortgage payments across the country were $ 1,897 in May, up from $ 1,889 in April and $ 1,736 in March. In the first five months of this year, payments increased by $ 513, or 37.1%.
The latest data comes from existing home sales falling to a seasonally adjusted annual rate of 5.41 million in May, down 3.4% from the previous month. Compared to the previous year, existing home sales decreased by 8.6%. Median existing home prices for all home types Prices in May increased by 14.8% from May 2021 to $ 407,600 as prices rose in all regions.
“Fixed mortgage rates have risen by more than two percent since the beginning of the year,” Freddie Mac chief economist Sam Carter said in a statement. “The combination of rising interest rates and rising home prices is likely to be the driving force behind the recent decline in existing home sales, but in reality, many potential homebuyers are still buying homes. Interested and staying competitive in the market, it has been flat for the past two years. Red activity. “
Total housing inventory at the end of May was 1.16 million units, up 12.6% from April and down 4.1% from the previous year. Unsold inventory is 2.6 months at the current sales pace, up from 2.2 months in April 2021 and 2.5 months in May.
Last week, the Federal Reserve Benchmark interest rate raised by 75 basis points For the first time in almost 30 years. The move has led the federal funds rate, a major benchmark, to range from 1.50% to 1.75%, the highest since the pandemic began two years ago.
Authorities also showed a positive path to rate hikes for the rest of the year. New economic forecast Announced after a two-day meeting of the Federal Reserve Board, policy makers have shown that interest rates are expected to reach 3.4% by the end of 2022. This is the highest level since 2008.
Federal Reserve Chairman Jerome Powell At a press conference after the recent meeting, he told reporters that the Fed’s July meeting would raise another 75 or 50 basis points.
Goldman Sachs, Bank of America, Deutsche Bank, Recession 2022 or 2023.
FOX Business’s Megan Henney contributed to this report