Homebuyers these days face a much higher cost of ownership than they did a year ago, which has largely pushed them to the sidelines. With mortgage rates and home prices high and inventories low, the housing market has largely frozen.
Nearly two-thirds of Americans said they would wait for mortgage rates to drop before entering the mortgage market, according to a survey released this week by . BMO financial group, the eighth largest bank in North America. Only 6% of people planning to buy a home soon expect to do so this summer, which is considered the peak season for realtors. Refinancing plans are also on hold, with 81% of those planning to refinance saying they are waiting for interest rates to drop.
The survey also found that 68% of Americans plan to use a loan or line of credit from a financial institution to finance their home purchase. According to BMO, 46% of Americans plan to use some of their personal savings to pay for a home, such as a down payment. Nearly a quarter of those surveyed said they expected financial help from family and friends when buying a home.
Mortgage interest rate stays the same stubbornly high Interest rates hit 6.94% on Thursday, just below the recent high of 7.14% in late May.of Mortgage Bankers Association The Federal Reserve said on Wednesday that mortgage applications fell about 30% year-over-year in the week ending June 2 in direct impact of the Federal Reserve’s 10th consecutive rate hike.
Still, some are optimistic that the housing market is at a bottom and will gradually improve.
“If we can achieve a true soft landing, [for the economy]it looks like we can do that, and then … interest rates will start to come down,” said John Toohig, head of whole-loan trading. Raymond James. “This is the bottom for the housing market. No one says, “Come on, let’s split the steak and put away the hot dog.” You know, it’s just an increment. … should see a 200 basis point drop [in rates] Before you see a meaningful refinancing business. ”