The 30-year fixed-rate mortgage averaged 5.22% in the week ending August 11, up from 4.99% the previous week, according to Freddie Mac. That’s significantly higher than this time last year when it was 2.87%.
“Despite continued price volatility, recent data suggests that the housing market is stabilizing as it transitions from increased activity during the pandemic to a more balanced market,” said Sam Khater, chief economist at Freddy Mac.
Affordability remains a challenge
One of the reasons housing prices continue to rise is the lack of homes for sale. “Supply is still fairly tight in most markets,” Khater said. “The result is that home prices will likely continue to rise, but at a slower pace for the rest of the summer.”
A year ago, a buyer who paid a 20% discount on a $390,000 median home and financed the rest with a 30-year mortgage at a 2.87% fixed interest rate received a monthly mortgage payment of $1,294, according to the figures. From Freddy Mac.
Today, a homeowner who buys a home at the same price at an average rate of 5.22% will pay $1,717 per month in principal and interest. That’s an extra $423 each month, according to numbers from Freddie Mac.
The share of listed homes dropping in price was 19% in July, closing at levels not seen since 2017, according to Realtor.com. In addition, the pace of price growth slowed down.
“These shifts signal a welcome change for buyers who are still in the market,” Ratio said. “The coming fall season may present a better opportunity, as long as the stock landscape continues to improve, as we’ve seen in recent months.”
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