“Middle-priced home buyers are looking forward to their monthly mortgage payments that are nearly 50% more than they were a year ago.” The 30-year mortgage rate fell slightly to 5.1%. 2022-04-28 09:21:00

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The interest rate on the country’s benchmark mortgage product has fallen for the first time since early March, but that doesn’t mean the housing market will see a delay.

The 30-year fixed-rate mortgage averaged 5.1% for the week ended April 28, According to the data released by Freddy Mac
FMCC,
+ 1.55%

Thursday. That’s one basis point lower than the previous week – one basis point equals one hundred percentage points, or 1% of 1%.

Last week was the first time that mortgage rates exceeded 5% since 2011. Within a year, the average rate on a 30-year home loan was less than 3%.

Meanwhile, the 15-year mortgage has risen by two basis points to an average of 4.4% over the past week. The 5-year Treasury-linked adjustable hybrid averaged 3.78%, up three basis points from the previous week.

A moderation in mortgage rates is a reflection of market movements for long-term bonds. It is worth noting that the yield on 10-year treasury bonds
TMUBMUSD10Y,
2.866%

It rose above 2.9% earlier in the week before settling lower, indicating how concerns about the COVID situation in China are affecting investors.

“Markets are increasingly weighing that with Beijing likely to follow the steps of a mass quarantine in Shanghai, the outlook for economic growth is waning, which could impact the US economy,” said George Ratio, director of economic research at Realtor.com.

Despite this brief setback, mortgage rates rose at the fastest pace in more than 40 years, Sam Khater, chief economist at Freddie Mac, said in the report. And this trend is likely to continue, given that inflation remains hot.

“Middle-priced home buyers are looking forward to their monthly mortgage payments that are nearly 50% more than they were a year ago.”


– George Ratio, Director of Economic Research at Realtor.com

This will cause the Federal Reserve to raise interest rates and adjust its mortgage-backed securities in the coming months, which will put pressure on mortgage rates. It’s hard to underestimate how disruptive the historic rise in mortgage rates has been over the past few months.

“Buyers are already constrained by low inventories, which is driving up prices,” Rubella Farooqi, chief US economist at High Frequency Economics, wrote in a research note. “Continuing increases in mortgage rates will be additional headwinds for future home sales.”

The latest data on both pending home sales and mortgage applications released on Wednesday painted a picture of weak demand from home buyers. The combination of higher prices and higher interest rates has made buying a home a lot less expensive, and it’s possible that some families have been taken out of the home buying market – at least for now.

“Middle-priced home buyers are looking at monthly mortgage payments that are nearly 50% more than they were a year ago, adding an additional $580 to their monthly expenses,” Ratio said. “It is not surprising that many are backing away from the market, hoping that conditions will improve.”

For those Americans who insist, they will be rewarded with a less competitive market, which could give them more homes to choose from and less likelihood of facing a bidding war.

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