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Based on recent data, mortgage rates in the U.S. have remained relatively flat compared to last week.
The 30-year fixed-rate mortgage—the most popular choice among homebuyers—has maintained a stable rate of 6.96%, up 10 basis points from yesterday and flat from the previous week.
The 30-year fixed-rate refinancing rate climbed to 7.12%, an increase of 11 basis points from the previous day and a 1 basis point rise from the prior week.
The average 15-year fixed-rate mortgage saw a 6.20% rate, which is a 4 basis point increase from the day before and only a 7 basis point hike from the previous week.
Jumbo loans, which are properties exceeding the conventional conforming loan limits (around $647,000 in most regions), experienced a rate of 7.07%, a 13 basis point increase from the prior day and a 3 basis point climb from the previous week.
Regarding 5/1 adjustable-rate mortgages—featuring a fixed rate for five years before adjusting annually—the average remained at 5.65%, the same as the previous day but with a 1 basis point decrease from the prior week.
The 30-year Federal Housing Administration-insured mortgage rate reached 6.10%, an increase of 17 basis points from the previous day and a 6 basis point drop from the prior week.
Meanwhile, VA loans recorded a rate of 6.21%, reflecting a 15 basis point increase.
Artificially low mortgage rate tipping point
While the stability of mortgage rates is a positive development, homebuyers should be aware of the artificially low mortgage rate tipping point.
A recent CNBC report explained that many homebuyers are basing their decisions on an unrealistic expectation of low mortgage rates. This could lead to disappointment if rates increase, resulting in higher monthly payments or even pricing some buyers out of the market.
The report suggests homebuyers should carefully consider the impact of potential mortgage rate fluctuations on their decision to purchase a home.
Regardless of how the current mortgage market is performing, most economists agree it’s essential to have a realistic understanding of how rates may change in the future and be prepared for the possibility of higher mortgage payments.
By staying informed, buyers can avoid being caught off guard by sudden rate increases and make better decisions about their home purchases.
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The emergence of a seller’s market
Current market conditions are shaping up to be a seller’s market in many areas of the U.S.
A Realtor.com survey revealed recently that homeowners looking to sell their homes in the coming months could benefit from the current market dynamics.
The report indicates that a significant portion of potential sellers plan to list their homes in the next few months, with many of them feeling confident about their ability to sell at a favorable price.
This surge in home listings could lead to increased competition among buyers, driving up home prices and creating a more challenging environment for those looking to purchase a property.
However, sellers can capitalize on this opportunity by taking advantage of the favorable market conditions and potentially securing a higher sales price for their homes.
New home sales boosted by existing home shortage
In April, the index evaluating new home builders’ confidence in their market experienced a slight increase.
The NAHB/Wells Fargo Housing Market Index (HMI) rose by 1 point to 45, as the limited availability of pre-owned homes for sale continues to support new home sales.
According to NAHB’s lead economist, Robert Dietz, new construction currently comprises one-third of the housing inventory, compared to the historical average of just over 10 percent.
Since the end of 2022, the growing interest in new homes and the implementation of sales incentives have bolstered new home sales.