However, options for renters appear to be improving
of ConsumerAffairsWith sticky inflation and rising bond yields, mortgage rates continue to move higher. The Mortgage Bankers Association, whose readings are often slightly higher than Freddie Macs, says the average rate on the 30-year fixed-rate mortgage hit 7.09% at the end of last week.
Its the first time the rate has exceeded 7% in several months and is a full percentage point higher than it was in September.
Bond yields in the U.S. and abroad continued to move higher in response to concerns over a sticky inflation outlook and still too-high budget deficits, which pushed mortgage rates higher for the fifth consecutive week, said Joel Kan, MBAs deputy chief economist.
This time of the year is a particularly volatile time for application volumes, so it can be more helpful to focus on the level rather than the percent change. Purchase applications were 2% and refinances were 22% higher compared to a year ago.
We expect a gradual reduction in mortgage rates could thaw the market, encouraging more buyers and sellers to re-enter after a relatively stagnant 2024, Edward Asher, vice president of Treasury at Better.com, told ConsumerAffairs. However, lingering affordability concerns in metropolitan areas and tight new home construction could still place upward pressure on prices.
Renters may be getting a break
Mortgage rates have risen for five consecutive weeks, adding to the challenge for homebuyers. But while its getting more expensive to purchase a home, a report from real estate broker Redfin suggests renting a home is getting more affordable.
The median asking rent was down 0.1% from a month earlier, and down 6.2% from its August 2022 record high of $1,700 per month.
The median asking rent per square foot dropped 1.9% year over year in December to $1.78, and fell 0.1% month over month. Rents are declining after a wave of apartment construction that has increased vacancy rates.
The December Consumer Price Index shows rent rose 0.3% from November and was up 4.3% year-over-year. The owners equivalent of rent a category that measures home ownership costs rose at a faster rate and was up nearly 5% in 2024.
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Posted: 2025-01-15 16:10:34
