After five consecutive weeks of being in decline, mortgage rates did an about-face and to an upswing, according to the latest Primary Mortgage Market Survey published by Freddie Mac.
The 30-year fixed-rate mortgage at the end of the week averaged 6.43%, up from last week when it averaged 6.39%. This time last year, it averaged 5.11%.
“For the first time in over a month, mortgage rates moved up due to shifting market expectations,” said Sam Khater, Freddie Mac’s chief economist. “Home prices have stabilized somewhat, but with supply tight and rates stuck above six percent, affordable housing continues to be a serious issue for many potential homebuyers. Unless rates drop into the mid-five percent range, demand will only modestly recover.”
According to US News & World Report, mortgage rates are still widely expected to fall before the end of 2023; but the expectation is that rates won't dip below 6% until the second half of the year, and that news seems to be changing daily. If rates do decline, it’s unlikely they will drop below the 5% range. While the pain of rapidly rising rates in 2022 kept many homebuyers on the sidelines, many have begun to acclimate to the new normal and are back in the market.
In Los Angeles County, the total number of home sales year over year is down 30.2% while sale prices are only down 8%, according to the California Association of Realtors (CAR). A shortage of homes on the market is keeping competition and prices strong. With such a shortage of homes for sale, we are seeing multiple offers and bidding wars, as we saw in early 2022. It appears that the median price will keep increasing from its low in February, but we don’t know if they will reach their peak levels of $900,000 set last May.
Seasonal demand usually picks up in the spring and summer as many homeowners prepare to list their homes. Even with increased inventory, it is likely to remain a seller’s market at least for the foreseeable future. If you’re planning on selling, it’s still a good time.
Comments