Bull Session: Is the rising rate affecting your plan to buy a house?
Recently, the mortgage rate reached 6.09% in early February. MBA (Mortgage Bankers Association) forecasts the rate will decline to an average of 5.7% throughout 2023. Mooers, Is the rising rate affecting your plan to buy a house?
Since inflation, jobs, and retail spending figures have been surprisingly strong, the Federal Reserve needs more efforts to keep things under control. To bring down high inflation and cool the economy, the Federal Reserve has aggressively raised its benchmark federal funds rate, paralyzing the US housing market and sapping buyer interest.
Mortgage rates have been much lower at an average of 3.78% for the past ten years (before last year' s uptick). That has led to millions of homeowners with mortgages issued during 2020 or 2021 at rates of 3% or even less — $5.5 trillion in mortgages were refinanced during those two years. Ever since the federal fund rates soar, the mortgage rates have elevated to nearly 7% at the end of 2022. Mortgage rates had been trending downward after hitting a peak in November but are now climbing again, up about half a percentage point this month.
The Federal Reserve may eventually raise rates to 6%, the highest level since 2000, prompting traders to place wagers. That would have big implications for the housing market and particularly for homeowners who locked in a low mortgage rate early in the pandemic.
The good news is that 70% of US home buyers have locked the 30-year interest rate below 4%, according to Goldman Sachs. The rising federal fund rates will not affect this group of people. If the rate increases too high, they may choose to delay changing houses. We' ve already seen homeowners grow reluctant to sell their houses because it would mean giving up their cheap mortgages. The excess cash might be spent in the consumer service industry while not being plumped into the housing market, contributing to "sticker" inflation.
So mooers, is the rising rate affecting your plan of getting your own house? Will you rather delay or do it now?
Source: Bloomberg, Wall Street Journal, Goldman Sachs
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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T2000 : buying a home is not affordable. higher prices mean more down payment, and high interest rates mean higher payment. they don't want us to own a home. millions of people will lose there home as they destroy the economy.
agreeable Leopard_91 : the government is trash like these the DOJ n the president as long as those MF r banking money along with HF n Big Banks nobody gives a shit about the people the us is appalling to say the least they r no superpower n probably the most corrupt of all countries that's why the us is the way it is you r either poor or rich n they want to keep it that way maybe in a 100 years when all those politicians nHF n CEO that are corrupt are long gone under the ground the new generation that takes over will change things for the future of others