Just what aspiring home buyers may be waiting for: some steadiness in mortgage rates. Of course, that doesn’t necessarily mean greater home affordability.
After the Federal Reserve voted this week to hold its federal funds rate steady, the 30-year fixed-rate mortgage remained nearly unchanged from the previous week. Mortgage rates have been climbing steadily, reaching nearly 8%. “This could be a turning point for the relief potential buyers and sellers desperately need,” says Jessica Lautz, deputy chief economist at the National Association of REALTORS®.
But the possibility of future hikes still looms. “The Federal Reserve again decided not to raise interest rates but have not ruled out a hike before year-end,” says Sam Khater, Freddie Mac’s chief economist. “Coupled with geopolitical uncertainty, this ambiguity around monetary policy will likely have an impact on the overall economic landscape and may continue to stall improvements in the housing market.”
NAR and two other major housing groups recently wrote to Fed Chairman Jerome Powell, saying that uncertainty around the Fed’s rate path is creating additional disruptions in the real estate market, and may even invite a recession.
Fluctuations From Market to Market
The 30-year fixed-rate mortgage averaged 7.76% this week, Freddie Mac reports. That translates to a typical monthly mortgage payment of $2,290 for a single-family existing home at the median price of $399,200, Lautz says. For a typical existing condo, the monthly mortgage payment would be $1,901.
“However, these are only broad strokes in a housing market that is local,” Lautz notes. For example, the median home price in the West is $606,100, and at today’s rate average, that equates to a monthly payment of $3,477. That’s significantly higher than the national average.
On the other hand, for buyers in the Midwest, where the median home price is $293,300, the monthly payment would equate to $1,693, which is lower than the national average.
What’s more, “some home buyers face stiff competition with limited inventory in their price points and need significant help with negotiations for a successful home bid,” Lautz says. “A REALTOR® is essential to helping home buyers with this transaction.”
Freddie Mac reports the following national averages with mortgage rates for the week ending Nov. 2:
- 30-year fixed-rate mortgages: averaged 7.76%, dropping from last week’s 7.79% average. A year ago, 30-year rates averaged 6.95%.
- 15-year fixed-rate mortgages: averaged 7.03%, unchanged from last week’s average. A year earlier, 15-year rates averaged 6.29%.