A report released Thursday by Redfin said homebuyers are looking for homebuyers on a budget as mortgage rates drop from a 20-year high.
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Things are starting to look for homebuyers on a budget.
Buyers with a monthly budget of $2,500 can buy a $400,000 home for the first time since September 2022 as mortgage rates drop from their all-time highs in late 2022, according to a published report. Thursday By online broker Redfin.
The average mortgage interest rate on February 2 was 5.99%, according to the . mortgage news daily — the first reading down 6% recorded since September. A downward trend in mortgage rates means the buyer whose budget is $2,500 can afford to spend about $35,000 more on a home than he did in November when interest rates peaked at 7%. increase.
Homebuyers on that budget still have $95,000 less purchasing power than they did about a year ago when interest rates were 3.5%. But bond reserve investors, who predict that mortgage rates are on a downward trend and that the recent rate hike by the Federal Reserve may be the last, could give some buyers confidence to get back into the market. It was enough.
“We expect more homebuyers and sellers to gradually return to the market by spring, but economic news and market reaction have been mixed,” Chen Zhao, research leader for economics at Redfin, said in a statement. The recovery will be uneven because of the “For example, this week’s rate hike by the Federal Reserve is both encouraging and disappointing. The Fed has raised rates at a slower pace than last year. But it also hints at continued interest rate hikes to combat inflation, the sharp drop in mortgage rates some optimistic buyers have been waiting for. are likely to prevent
According to Redfin, mortgage purchase applications were up 15% from their early November trough, but fell 10% week-on-week in the week ending February 2. The Home Buyer Demand Index, Redfin’s internal measure of housing demand, reached its highest level since September in his four weeks to Jan. 29. Up 5% from the previous month, but down 25% from the previous year.
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