Mortgage rates in the US hold at the lowest level since October
Affordability remains a serious hurdle, especially for first-time buyers
[WASHINGTON] Mortgage rates in the US held steady after four weeks of declines.
The average for 30-year, fixed loans was 6.58 per cent, unchanged from last week, when it dropped to the lowest point since October, Freddie Mac said in a statement.
Rates have come down enough in the past few months to potentially lure some hesitant house hunters off the fence. In parts of the country where listings are lingering, sellers have been willing to negotiate, offering help with closing costs and other concessions. But affordability remains a serious hurdle, especially for first-time buyers.
Sales of previously owned homes climbed in July as price growth eased, the National Association of Realtors reported on Thursday (Aug 21). That doesn’t mean the market’s become affordable: Prices have soared more than 50 per cent since early 2020, the group said.
Only 28 per cent of available listings are priced within reach of the typical US household, according to an analysis by Realtor.com. Buyers have lost about US$30,000 in purchasing power since 2019, when mortgage rates were around 4 per cent, the group said. Incomes, while rising almost 16 per cent in the past six years, haven’t kept pace.
“Higher interest rates have eroded the real-world purchasing power of the typical American household,” said Danielle Hale, Realtor.com’s chief economist.
“This dynamic is forcing many buyers to adjust their expectations, whether that means looking for smaller homes, moving farther out or delaying the dream of homeownership altogether.”
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