Halloween is over, the scary season is over, and the fear in the housing market is slowly starting to calm down.
Mortgage rates are falling slightly after a dramatic rise. Go outgovernment-backed home loans company fannie mae According to , interest rates on 30-year fixed-rate mortgages fell to 6.73% on Thursday. By mid-October, it had reached over 8%.
Interest rates are also falling, so Demand for home loans is starting to increase.As the Mortgage Bankers Association says, this is a modest increase. Demand in early November was 12% lower than the same period in 2022..
Mortgage borrowing costs are at their highest in 20 years, but prices continue to rise because there are fewer homes on the market. This puts home ownership out of reach for many people.
That changed as investors became convinced that the Fed’s interest rate hikes might indeed be over. The company will raise its base interest rate from near zero in early 2022 to a range of 5.25-5.5% by July, with interest rates on mortgages, car loans, credit cards, and other financial products also rising accordingly. did.
The difference between regular interest rates and home loan interest rates has also become abnormally large.
Mortgage rates continued to rise as investors thought the Fed was likely to continue raising interest rates, even though the Fed hadn’t raised them in more than three months.
However, there are signs that inflation continues to slow, and the Fed may be satisfied with the progress it is making in curbing price increases.Mortgage interest rates will then stabilize and begin to fall.
However, over the long term, lower mortgage rates may not make housing more affordable, as lower mortgage rates tend to increase home prices. This is precisely because it makes it easier for buyers to borrow money.