With a monthly mortgage payment increase of 3.7% and a 2.8% rise in the median price of single-family homes, qualifying for a home loan was more challenging for potential buyers in May 2023.
The 30-year fixed rate increased further this week to 6.96% from 6.81% last week, hitting the highest level in 8 months.
Decelerating consumer prices could steadily lift home sales and increase home production in a few months.
Jobs have been added continuously since the lifting of the lockdown, but the latest monthly net gain of 209,000 is the smallest in 2.5 years.
May's pending home sales pace declined 2.7% from last month and fell 22.2% from a year ago.
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Single-family homes built to rent can give renters a yard for a pet and room for a home office or a new baby while they save for a down payment.
Mortgage rates fell for the second straight week, with the average rate on a 30-year fixed mortgage ticked down to 6.69% from 6.71% the previous week.
There is no need to consider raising interest rates; in fact, the Fed should look at cutting interest rates before the end of the year.
Inflation calmed down in May 2023, and further deceleration looks likely in the upcoming months. Low inflation means that the Federal Reserve should stop raising interest rates and possibly slash rates towards the year-end or early next year.
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