Falling Mortgage Rates, Rising Supply Create Opportunity for Homebuyers This Summer, Even Amid Record-High Prices
2024年7月12日 - 9:00PM
ビジネスワイヤ(英語)
Homebuyers on a $3,000 monthly budget have
gained over $20,000 in purchasing power since mortgage rates peaked
in the spring
(NASDAQ: RDFN) — A homebuyer on a $3,000 monthly budget can
afford a $447,750 home with a 6.85% mortgage rate, the daily
average as of July 11, according to a new report from Redfin
(redfin.com), the technology-powered real estate brokerage. That
buyer has gained $22,500 in purchasing power since mortgage rates
hit a five-month peak in April, when they could have bought a
$425,500 home with an average rate of 7.5%.
Mortgage rates dropped to their lowest level since March on
Thursday’s inflation report, and the supply of homes for sale is
rising, giving buyers a sweet spot before competition picks up.
To look at affordability another way, the monthly mortgage
payment on the typical U.S. home—which costs roughly $400,000—is
$2,647 with the current 6.85% rate. That’s down nearly $200 from
$2,814 with a 7.5% rate.
The drop in mortgage rates comes after the latest CPI report
showed that inflation is cooling faster than expected and upped the
chances that the Fed will cut interest rates by September.
It’s likely that mortgage rates will continue declining slightly
in advance of the expected interest-rate cuts, but it’s unlikely
they’ll drop below 6% before the end of the year.
Even though mortgage rates are declining, sale prices are still
at record highs and total housing costs are historically high.
Prices are unlikely to drop meaningfully in the near future.
The other piece of good news for buyers: More homes to choose
from
Rising inventory is also promising for buyers: New listings of
homes for sale are up 7% year over year, and the total number of
homes for sale is near its highest level since late 2020.
More homes are hitting the market partly because homeowners,
many of whom are locked into ultra-low mortgage rates, are tired of
waiting for rates to drop dramatically before listing their homes.
Rates have been sitting at double pandemic-era lows for nearly two
years, and homeowners have come to terms with the fact that if they
wait for rates to drop to 3% or 4% before selling and moving onto
their next home, they may be waiting for several years. The fact
that rates are declining slightly right now may lure more would-be
sellers off the sidelines.
Homes are also sitting on the market longer than usual. More
than 60% of homes that were on the market in May had been listed
for at least 30 days without going under contract, up from 50% two
years earlier. Two in five (40%) homes had been listed for at least
two months without going under contract, up from 28% two years
earlier.
The uptick in homes for sale, along with the fact that many
listings are growing stale, means many of the less-desirable homes
on the market are having a hard time finding a buyer. That gives
homebuyers in some places a chance to get a home for under the
asking price and negotiate for other money savers, like home
repairs or help with closing costs.
“Now is a good time–at least compared to the recent past–for
serious house hunters to get under contract on a home,” said Redfin
Chief Economist Daryl Fairweather. “The combination of declining
mortgage rates, rising supply and a lot of inventory growing stale
means buyers have a window where they have more purchasing power
than earlier in the year and more homes to choose from. But it’s
hard to say how long the window will last. Declining rates should
bring many homebuyers back to the market soon, which means
competition would tick up and home prices would increase even
faster than they already are. It’s also possible rates drop further
in 2025, which would make monthly costs decline more and increase
competition even more. One thing is for sure: lower rates will lead
to more home sales.”
To view the full report, please visit:
https://www.redfin.com/news/mortgage-rates-fall-payments-down
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate
company. We help people find a place to live with brokerage,
rentals, lending, title insurance, and renovations services. We run
the country's #1 real estate brokerage site. Our customers can save
thousands in fees while working with a top agent. Our home-buying
customers see homes first with on-demand tours, and our lending and
title services help them close quickly. Customers selling a home
can have our renovations crew fix it up to sell for top dollar. Our
rentals business empowers millions nationwide to find apartments
and houses for rent. Since launching in 2006, we've saved customers
more than $1.6 billion in commissions. We serve more than 100
markets across the U.S. and Canada and employ over 4,000
people.
Redfin’s subsidiaries and affiliated brands include: Bay Equity
Home Loans®, Rent.™, Apartment Guide®, Title Forward® and
WalkScore®.
For more information or to contact a local Redfin real estate
agent, visit www.redfin.com. To learn about housing market trends
and download data, visit the Redfin Data Center. To be added to
Redfin's press release distribution list, email press@redfin.com.
To view Redfin's press center, click here.
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version on businesswire.com: https://www.businesswire.com/news/home/20240712751925/en/
Redfin Journalist Services: Angela Cherry press@redfin.com
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