Mortgage rates continued to climb this week, with the 30-year fixed-rate mortgage hitting 6.94%, according to Freddie Mac. That’s up from last week when it averaged 6.90%. The average rate for a 15-year mortgage was 6.26%, down from 6.29% last week.
Last year at this time, both 30-year and 15-year mortgages were down from where they are now. A year ago, the 30-year fixed-rate mortgage averaged 6.65%, while the 15-year fixed-rate mortgage averaged 5.89%.
“Mortgage rates continued their ascent this week, reaching a two-month high and flirting with seven percent yet again,” said Sam Khater, Freddie Mac’s chief economist. “The recent boomerang in rates has dampened already tentative homebuyer momentum as we approach the spring, a historically busy season for homebuying.“
“While sales of newly built homes are trending in a positive direction, higher rates and elevated prices continue to pose affordability challenges that may leave potential homebuyers on the sidelines,” Khater continued.
Credible makes it simple to compare mortgage rates all in one place, without affecting your credit score.
NEARLY 89% OF U.S. HOMEOWNERS WITH MORTGAGES HAVE AN INTEREST RATE BELOW 6%: REDFIN
Pending home sales dropped in response to rising rates
In response to rates rising again, home sales went down in January. The Pending Home Sales Index decreased 4.9% month-over-month, according to the National Association of Realtors.
Certain areas of the country took a bigger hit than others. Contract signings rose in the Northeast and the West, but they fell in the Midwest and the South. In general, home sales are down across the country compared to last year, NAR noted.
“The job market is solid, and the country’s total wealth reached a record high due to stock market and home price gains,” NAR Chief Economist Lawrence Yun said. “This combination of economic conditions is favorable for home buying. However, consumers are showing extra sensitivity to changes in mortgage rates in the current cycle, and that’s impacting home sales.”
If you’ve found the home of your dreams and are ready to buy, a site like Credible can let you view multiple mortgage lenders and provide you with personalized rates within just minutes, all without impacting your credit.
HOMEOWNERS’ MONTHLY MORTGAGE PAYMENTS DROPPED TO LOWEST RATE IN YEARS
Prospective homebuyers being driven out of states with high homeowners insurance rates
It’s not just high interest rates and high housing costs that are driving away prospective buyers. High homeowners insurance rates are also causing homebuyers in certain states to avoid buying.
Across the U.S., the average price of homeowners insurance went up by 12% in 2023 for $300,000 properties, according to an Insurify study. Now, the average yearly premium sits at $1,770 per year.
Florida is the state being affected most. The state’s average premium is thousands higher than the national average. Floridians pay an annual premium of $9,213 for their insurance. This is largely due to the increase in natural disasters and the high payouts required from insurers.
After Florida, Oklahoma has the second-highest insurance rates at $4,782 annually. Mississippi is next, with residents paying annual rates of $4,017, on average. These states have also seen an unprecedented number of natural disasters in recent years, forcing insurance companies to raise premiums to keep up with demand.
If you’re looking to purchase a home in today’s market, you can explore your mortgage options by visiting Credible to compare rates and lenders and get a mortgage preapproval letter in minutes.
THIS IS THE #1 CITY FOR FIRST-TIME HOMEBUYERS, AND OTHER HOT US HOUSING MARKETS
Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.
Read the full article here
