The 30-year fixed-rate mortgage averaged 5.22% in the week ending Aug. 11, up from 4.99% the week before, according to Freddie Mac. That’s significantly higher than this time last year. when it was 2.87%.
“Although rates continue to fluctuate, recent data suggests the housing market is stabilizing as it moves from increased activity during the pandemic to a more balanced market,” said Sam Khater, chief economist at Freddie Mac.
Affordability remains a challenge
One of the reasons home prices continue to rise is the lack of available homes for sale. “Supply is still quite limited in most markets,” Khater said. “The consequence is that house prices will probably continue to rise, but at a slower pace for the rest of the summer.”
A year ago, a buyer who put 20% down on a $390,000 median priced home and financed the rest with a 30-year fixed-rate mortgage at an average interest rate of 2.87% had a monthly mortgage payment $1,294, according to the figures. by Freddy Mac.
Today, a homeowner buying the same price home with an average rate of 5.22% would pay $1,717 a month in principal and interest. That’s $423 more each month, according to figures from Freddie Mac.
The proportion of listed homes with price reductions reached 19% in July, approaching levels not seen since 2017, according to Realtor.com. In addition, the pace of price growth has moderated.
“These changes point to a welcome change for buyers who are still in the market,” Ratiu said. “The upcoming fall season may offer an even better window of opportunity, provided the inventory picture continues to improve, as we have seen in recent months.”
