Struggling US home buyers, and market, face new hurdles as mortgage rates near 7%
Higher borrowing costs are squeezing affordability and could push more would-be buyers to delay purchases, economists said.
- On Wednesday, the Federal Reserve voted to boost its benchmark interest rate by 0.25%, pushing 30-year fixed-rate mortgages above the 7% threshold this week.
- Mortgage rates follow the trajectory of 10-year Treasurys, influenced by inflation and bond market expectations. Rising borrowing costs have kept the housing market in a rut since the war between the U.S. and Iran began in late February.
- Freddie Mac reported a 14-month high of 6.76% on Sept. 10, while Orlando Regional Realtor Association President Chris Atwell noted Central Florida median home prices remain above $400,000.
- Higher rates squeeze affordability and sideline prospective buyers, said Lisa Sturtevant, chief economist at Bright MLS. Sellers may need to "reduce prices, offer more concessions or lower the price of the house" to attract buyers.
- The Fed indicated Wednesday that another rate hike could occur later this year. "I believe probably for the rest of the year, we'll be in that same environment," Ali Partovi of Partovi Funding LLC said.
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America In Focus: affordability concerns rise as Fed hikes key rate, mortgage rate reaches nearly 7% – WTOP News
The economy, inflation and how those forces could impact the lives of Americans were front and center over the past week. Trips to the grocery store and gas sta
America In Focus: affordability concerns rise as Fed hikes key rate, mortgage rate reaches nearly 7%
The Federal Reserve raised its benchmark interest rate Wednesday for the first time since 2023 in an effort to quell stubbornly high inflation, and the central bank signaled another rate hike could occur later this year.
It was a bad week for anyone looking to take out a new mortgage or refinance an old one. Due to rising tensions in the Middle East, mortgage rates shot up further. As a result, rates have climbed to their highest level in nearly three years.
Mortgage rates reach new high
Mortgage rates continue to climb nearing 7%.
It is possible that home buyers will soon have to face an unwanted reality: a mortgage rate of 7%.
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