The average interest rate for a 30-year fixed-rate mortgage rose to 7.31% this week, signaling a high not seen since the year 2000, according to the latest data by Freddie Mac. That’s an increase from last week’s average of 7.19%.
Additionally, the average rate for a 15-year fixed rate mortgage rose to 6.72%, up from last week when it averaged 6.54%. And this could continue to make housing less affordable as home prices also continue to rise.
“Unlike the turn of the millennium, house prices today are rising alongside mortgage rates, primarily due to low inventory,” Freddie Mac Chief Economist Sam Khater said in a statement.
The median home sales price was $374,975 for the four weeks ending Sep. 17, up 3.4% year-over-year, according to Redfin. This pushed median monthly house payments to an all-time high of $2,661.
But there are still ways to find a favorable mortgage rate on a home.
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Amid a housing market rattled by high home prices and mortgage rates, many potential buyers are closing the doors on homeownership – at least for now.
In fact, 60,000 home-purchase agreements were canceled in August, according to data from Redfin. That represented an increase from 14.3% a year earlier and the highest percentage spike since October 2022.
“I’ve seen more homebuyers cancel deals in the last six months than I’ve seen at any point during my 24 years of working in real estate,” Jaime Moore, a Redfin Premier real estate agent in Reno, said in a statement. “They’re getting cold feet. “Buyers get sticker shock when they see their high rate on paper alongside extra expenses for maintenance, repairs and closing costs. Many of them would rather back out, even if it means losing their earnest money.
“A lot of sellers are also willing to let buyers slip away because they don’t want to concede to repair requests,” Moore continued.
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With mortgage payments reaching record highs and elevated home prices pushing homebuyers out of the market, many sellers are willing to bring down their asking prices to close deals. In fact, prices dropped for about one in 15 (6.5%) of U.S. homes for sale during the four weeks ending Sep. 24. This is up from 5.8% a month prior according to the latest data from Redfin.
Jacksonville Redfin Premier agent Heather Kruayai expressed that now is the time to negotiate with sellers as major savings opportunities could arise with some effort.
“It’s still tough to win a home for under asking price, but sellers have come to terms with the fact that 7%-plus mortgage rates are giving buyers cold feet and that homes aren’t as likely to attract multiple offers,” Kruayai said. “Many sellers are open to making concessions like paying for repairs or helping fund a mortgage-rate buydown.
“Additionally, new listings have posted an unseasonal uptick since the beginning of September, meaning buyers have a bit more to choose from if sellers aren’t willing to negotiate,” she said.
New listings increased by 4% from July to August, according to research by Zillow. This was the first time new listings increased over those two months, according to Zillow’s records. Additionally, it found that the unusual bump in supply slightly loosened up the housing market, widening the outlook for home values to cool.
Kruayai adds that buyers are “holding a lot of the cards; today’s sellers need to concede on some details to close the deal.”
If you’re interested in buying a home, it can benefit you to compare your options to find the best mortgage rates. Visit Credible to get your personalized rate in minutes.
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