Rising Home Prices Amid Slight Mortgage Rate Dip: Analysis
Mortgage interest rates dipped this week, but not significantly. 30-year mortgage rates averaged little under 7%, at 6.99%, according to Freddie Mac’s weekly rates report.
Last week, the average 30-year fixed-rate mortgage was little over 7%. Both last week and this week’s rates are higher than they were at this time last year, when rates averaged 6.71%.
“Mortgage rates fell this week as incoming data showed slower growth,” Freddie Mac Chief Economist Sam Khater said. “Rates are just shy of seven percent, and we expect them to fall slightly throughout the rest of 2024. If a potential buyer wants to buy a home this year, waiting for lower rates may result in tiny savings, but shopping around for the best rate is still quite helpful.
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Interest rates for 15-year fixed-rate mortgages are also falling, but they remain firmly in the 6% range. This week, 15-year rates fell to 6.29%, down from 6.36% the previous week. These rates remain slightly higher than last year when 15-year FRMs averaged 6.07%.
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Home Prices are Still Rising
High property prices are still prevalent, particularly in certain parts of the country. Nationally, home prices grew by 0.6% in May, according to a Realtor.com analysis.
Prices rose more sharply in other sections of the country. Prices in the hottest real estate markets increased by 13.6%. This indicates that these markets are experiencing increased demand, despite the fact that it is a challenging time to acquire. For the seventh consecutive month, the Manchester-Nashua metro area ranks as one of the country’s hottest markets.
Despite high house prices, active listings remained high as the homebuying season heats up owing to improved weather. Active postings increased 35.2% year on year in May. Inventory increased by 15.6% in only the 20 hottest markets.
Demand in these locations is high, creating a competitive market and driving prices higher. After the Manchester-Nashua area, Hartford, Connecticut is the second-hottest buyer market. According to Realtor.com, Springfield, Massachusetts and Concord, New Hampshire rank third and fourth, respectively according to foxbusiness.com
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Housing Affordability is a Top Issue Among Young Voters
As the election approaches, people’s concerns about housing affordability rise. According to Redfin, Generation Z is the most concerned, with 91% naming affordability as one of the election’s most crucial issues.
Although Gen Zers value housing more than previous generations, all generations want the next president of the United States to address the issue of housing affordability. At least 80% of all generations polled stated housing is a critical issue they wish to address.
Every generation prioritizes housing affordability over abortion rights or student loan obligations. According to the report, Gen Z believed that housing was more essential than gun rights, overseas wars, and protecting democracy.
“Housing affordability is a cornerstone of this year’s presidential election because even though the economy is fairly strong, unemployment is low and wages are rising, buying a home feels impossible for many Americans,” Elijah de la Campa, senior economist at Redfin, “This is especially true for young people, who have seen the cost of starter homes rise twice as quickly as incomes.”
Young people are concerned about other political concerns, such as immigration and abortion rights, but housing affordability is more likely to influence their vote since it immediately affects the roof over their heads, their lifestyle, and their ability to acquire money,” de la Campa said.
Bottom Lines
Mortgage rates are hovering slightly at 7%, with minor decreases forecast. Home prices continue to grow across the country, notably in hot markets such as Manchester-Nashua. Concerns about home affordability are a top priority for young voters in the approaching election, with Generation Z being particularly anxious. Visit Credible to compare mortgage rates and discover choices based on your financial condition.