The average 30-year fixed mortgage rate jumped up to its highest level since 2002 last week, climbing above 7 percent, according to the Federal Home Loan Mortgage Corporation , known as Freddie Mac.asked two experts what the rise in mortgage rates is due to, and what this means for the housing market in the coming future.
Townhomes under construction on July 19, 2023, in Mundelein, Illinois. With homeowners reluctant to sell their homes and give up their existing low mortgage rates, the demand for new homes has spiked."Over the last year, the Federal Reserve has raised its key rate to try to tamper down inflation," Dr.
This is really bad news for all homebuyers, but especially for those trying to purchase their first homes. "The Federal Reserve's efforts to shrink its balance sheet combined with the increased size of government debt issuance is also causing Treasury yields—and mortgage rates—to increase." "Although inventory is nearly half of what it was before the pandemic, more supply is coming," he said."Builders are working to close the inventory gaps and that should ease price pressures."
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