The housing market is about to hit another speed bump, with mortgage rates rising above 7% for the third time this year.<\/p>\n
The 30-year fixed-rate mortgage rose from 6.95% on Monday to 7.01% on Tuesday afternoon, according to Mortgage News Daily. The 30-year was last above 7% in March, according to historical data.<\/p>\n
(Other groups like the Mortgage Bankers Association and Freddie Mac, who also release weekly surveys of where rates are, had yet to release their reports as of Tuesday afternoon).<\/p>\n
\u201cWe\u2019ll probably need a few weeks of data to know if this is a blip or a trend,\u201d Jacob Channel, senior economist at LendingTree, told MarketWatch.<\/p>\n
Nonetheless, rates have been pretty volatile in recent weeks, he added. \u201cEven if they don\u2019t stay above 7%, the fact that they\u2019re in that 6% to 7% range\u2026 it\u2019s tough for home buyers, because home prices have remained high for most parts of the country,\u201d Channel explained.<\/p>\n
\u201cThe reasons for higher rates are not crystal clear \u2014 they could reflect bond market jitters about the unresolved debt ceiling deadline approaching as soon as next week, or perhaps a growing concern that the Fed will opt to keep raising rates in its fight against inflation,\u201d Jeff Tucker, senior economist at Zillow \u201cWhatever the source, these higher rates are a difficult pill for buyers to swallow, and they give homeowners all the more reason to sit tight and avoid listing their homes,\u201d he added.<\/p>\n Many Americans feel despondent about the housing market. The number of people who think it\u2019s a good time to buy a home has hit a 45-year low.<\/p>\n Higher mortgage rates translate directly into a higher cost of homeownership.\u00a0<\/p>\n To be clear, most homeowners who have an existing 30-year fixed-rate mortgage won\u2019t see an increase in their interest costs because they\u2019ve already locked in a fixed rate.<\/p>\n But for new buyers who are in the process of getting a mortgage, owning a home is becoming more expensive: Between April 2022 and April 2023, the 30-year mortgage rate increased by an average of 1.85 percentage points across all 50 states, LendingTree said in a separate report.<\/p>\n That\u2019s pushed monthly mortgage payments up nationwide by an average of $121 per month, according to LendingTree. That means the typical household is paying around $1,452 more per year in mortgage payments.<\/p>\n Mortgage payments differ widely, depending on the price of the home that a buyer is purchasing and where they\u2019re buying. Rates and costs vary across states and cities and even local real-estate markets, as they\u2019re tied to home prices. <\/p>\n The median monthly mortgage payment paid by homeowners in Hawaii was the highest in the nation in March, at roughly $4,400, while homeowners in West Virginia typically paid around $1,100 for their mortgage, according to the Mortgage Bankers Association. <\/p>\n With mortgage rates bouncing around as home prices hold steady, \u201cpeople really just have to buckle in,\u201d Channel said, <\/p>\n For home shoppers looking to get a lower rate, shop around, Lisa Sturtevant, chief economist at Bright MLS, told MarketWatch.<\/p>\n \u201cBorrowers should really be shopping around and getting quotes from multiple lenders,\u201d she explained, particularly because rates have been volatile over the last few months, which means that there is variation in rates and terms across lenders.<\/p>\n Not every lender will quote a potential buyer a 30-year mortgage at a 7% rate, Channel said. And rates could go down significantly, depending on the state of the U.S. economy \u2014 or go up sharply.\u00a0<\/p>\n But for those waiting for rates to come down, don\u2019t hold your breath, Sturtevant said. \u201cIn the short-term, the debt ceiling debate has created uncertainty and will likely keep rates elevated, or perhaps push them even higher,\u201d she explained. Zillow expects rates to go up as past 8% if the U.S. defaults on its debt.\u00a0<\/p>\n If the U.S. economy enters a recession, rates will go down, both experts explained.<\/p>\n Nonetheless, don\u2019t expect rates to go back to the pandemic days of 2% and 3%, she advised. \u201cMy forecast is for the average rate on a 30-year fixed rate mortgage to be around 6% at the end of 2023,\u201d Sturtevant said.<\/p>\n For as long as Freddie Mac has been publishing weekly rate data, which dates back to 1971, rates have only come very close to 2% once, Channel noted.<\/p>\n And if a buyer is embroiled in a bidding war right now, the best tip Sturtevant had was to get financing locked in. <\/p>\n Buyers could also consider offering sellers an opportunity to rent the home back to them for a period of time, she suggested. \u201cThat could be an incentive if the seller is still looking for a place to move to.\u201d\u00a0<\/p>\n<\/p><\/div>\n
\n ZG,
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\n told MarketWatch. <\/p>\nHigher rates<\/strong> have added an average of $121 to monthly mortgage payments since last year<\/h2>\n
When will mortgage rates come down?<\/h2>\n