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  • Writer's pictureRealFacts Editorial Team

Mortgage Rates Dip Below 7%: A Mixed Bag for the Real Estate Market


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Mortgage rates dropped right below 7% this week, with the average 30-year fixed home loan rate falling from 7.03% last week to 6.99% this week. Over the last 2 months, mortgage rates have been floating just above or below the 7% benchmark.


Rates appear to be quite high; however, they aren’t causing a complete downturn in the real estate market for June. The amount of available homes for sale grew 35.5% above last year's levels. Senior economist Ralph McLaughlin says “Inventory levels continue to rise by about 30% year-over-year. This means buyers are sitting in a bittersweet market right now. They have the most options since before the COVID-19 pandemic but are stymied because of rising prices and stubbornly high mortgage rates.” The current condition of the housing market is in an interesting position with a wide variety of options available for purchase, but high interest rates and high housing prices make it difficult to find the right property at an affordable price.


Chart of weekly housing trends

Mortgage rates last week climbed over 7% after previously declining to 6.94% the week prior. Senior economic research analyst Hannah Jones said that the current interest rates and pricing are, “keeping many buyers in a holding pattern as they wait for progress towards affordability.” Many are currently waiting for future CPI inflation data to aid them in determining future buying and selling opportunities depending on inflation and interest rates. McLaughlin has also stated, “Overall, we anticipate inflation will continue to slow and will allow mortgage rates to decrease to around 6.5% by the end of 2024 or early 2025.” This remains the hope of practically anyone involved in the real estate market.


Although interest rates have changed quite frequently, listing prices for homes remained relatively flat year-over-year for the week ending June 1. The median home cost in May was $442,500. Listing prices did not grow but the median listing price per square foot did increase by 3.7%.


Fresh listings were up by 2.1% for the week ending June 1 compared to the previous year. However, the new listing growth rate sank from 3.6% the previous week. The recent increase in mortgage rates dampened seller activity over the last few weeks as homeowners have held off hoping for a decrease in mortgage rates in the coming months.


Homes for sale are spending a bit more time on the market, with the typical home spending one additional day on the market for the week ending June 1 compared to last year. In May, the average home was listed for 44 days. Since March, the average time a home has been on the market has fluctuated within a two-day range compared to the same period last year. Although homes are selling slightly slower, they are still selling faster than pre-pandemic times, as inventory levels of homes for sale are returning to pre-pandemic levels.

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