But with high home prices, affordability remains an issue
of ConsumerAffairsAs the year draws to a close, conditions appear to be improving for homebuyers. Freddie Mac reports its Primary Mortgage Market Survey shows the 30-year fixed-rate mortgage (FRM) averaged 6.60% this week.
The 30-year fixed-rate mortgage decreased for the third consecutive week, said Sam Khater, Freddie Macs chief economist.
The combination of mortgage rate declines, firm consumer income growth and a bullish stock market have increased homebuyer demand in recent weeks. While the outlook for the housing market is improving, the improvement is limited given that homebuyers continue to face stiff affordability headwinds.
But the improvement in rates hasnt drawn in buyers in great numbers. The Mortgage Bankers Association reports its Market Composite Index, a measure of mortgage loan application volume, increased 5.4% on a seasonally adjusted basis from one week earlier, but most of that activity was current homeowners refinancing an existing loan.
The Refinance Index increased 27% from the previous week and was 42% higher than the same week one year ago. The seasonally adjusted Purchase Index declined by 4% from one week earlier.
But mortgage rates are just one factor in home affordability. Home prices, which surged during the COVID-19 pandemic, are still rising. In late November, the National Association of Realtors reported that the median home price in October was $409,000, a 4% increase from a year earlier.
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Posted: 2024-12-13 16:09:52
