Mortgage Rates Climb for Fourth Straight Week
By Alex Veiga
The average rate on a 30-year mortgage rose to 7.17% from 7.1% last week. Costs on 15-year fixed-rate mortgages rose to 6.44% from 6.39%.
LOS ANGELES — The average long-term U.S. mortgage rate climbed this week to its highest level since late November, another setback for home shoppers in what’s traditionally the housing market’s busiest time of the year.
The average rate on a 30-year mortgage rose to 7.17% from 7.1% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.43%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also rose this week, lifting the average rate to 6.44% from 6.39% last week. A year ago, it averaged 5.71%, Freddie Mac said.
When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford at a time when the U.S. housing market remains constrained by relatively few homes for sale and rising home prices.
The average rate on a 30-year mortgage has now increased four weeks in a row. The latest uptick brings it to its highest level since November 30, when it was 7.22%.
After climbing to a 23-year high of 7.79% in October, the average rate on a 30-year mortgage had remained below 7% since early December amid expectations that inflation would ease enough this year for the Federal Reserve to begin cutting its short-term interest rate.
Mortgage rates are influenced by several factors, including how the bond market reacts to the Fed’s interest rate policy and the moves in the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
Home loan rates have been mostly drifting higher after a string of reports this year showing inflation remaining hotter than forecast, which has stoked doubts over how soon the Fed might decide to start lowering its benchmark interest rate. The uncertainty has pushed up bond yields.
Top Fed officials themselves have said recently they could hold interest rates high for a while before getting full confidence inflation is heading down toward their target of 2%.
The rise in mortgage rates in recent weeks is an unwelcome trend for home shoppers this spring homebuying season. Sales of previously occupied U.S. homes fell last month as homebuyers contended with elevated mortgage rates and rising prices.
While easing mortgage rates helped push home sales higher in January and February, the average rate on a 30-year mortgage remains well above 5.1%, where was just two years ago.
That large gap between rates now and then has helped limit the number of previously occupied homes on the market because many homeowners who bought or refinanced more than two years ago are reluctant to sell and give up their fixed-rate mortgages below 3% or 4% — a trend real estate experts refer to as the “lock-in” effect.
“The jump in mortgage rates has taken the wind out of the sails of the mortgage market,” said Bob Broeksmit, CEO of the Mortgage Bankers Association. “Along with weaker affordability conditions, the lock-in effect continues to suppress existing inventory levels as many homeowners remain unwilling to sell their home to buy a new one at a higher price and mortgage rate.”
Homebuilders have been able to mitigate the impact of elevated home loan borrowing costs this year by offering incentives, such as covering the cost to lower the mortgage rate homebuyers take on. That’s helped spur sales of newly built single-family homes, which jumped 8.8% in March from a year earlier, according to the Commerce Department.
“With rates staying higher for longer, many homebuyers are adjusting, as evidenced by this week’s report that sales of newly built homes saw the biggest increase since December 2022,” said Sam Khater, Freddie Mac’s chief economist.
Born
John James Audubon (naturalist) – 1785
Frederick Law Olmsted (landscape architect) – 1822
Ma Rainey (blues singer) – 1886
Charles Richter (seismologist) – 1900
Carol Burnett (actress) – 1933
Duane Eddy (musician) – 1938
Jet Li (actor and martial artist) – 1963
Kevin James (actor) – 1965
Tom Welling (actor) – 1977
Realtor.com® February Rental Report: Renting Now Beats Buying in All of the Largest U.S. Metros
SANTA CLARA, Calif., March 26, 2024 /PRNewswire/ -- Elevated mortgage interest rates, still-high home prices and falling rents have made it more affordable to rent than buy in all of the top 50 U.S. metros, according to the Realtor.com® Rental Report released today. In February, the mortgage payment on a starter home in the largest metros cost $1,027 (+60.1%) more than the monthly rent in those markets, on average. At the same time last year, 45 metros favored renting.
The top 10 metros with the largest rent versus buy savings (see below for top 50 metros):
1. Austin-Round Rock-Georgetown, Texas – $2,165 monthly rent savings (141.5% difference)
2. Seattle-Tacoma-Bellevue, Wash. – $2,422 (121.1%)
3. Phoenix-Mesa-Chandler, Ariz. – $1,528 (99.0%)
4. San Francisco-Oakland-Berkeley, Calif. – $2,689 (95.5%)
5. Los Angeles-Long Beach-Anaheim, Calif. – $2,539 (89.7%)
6. San Jose-Sunnyvale-Santa Clara, Calif. – $2,780 (86.7%)
7. Nashville-Davidson-Murfreesboro-Franklin, Tenn. – $1,366 (86.0%)
8. Portland-Vancouver-Hillsboro, Ore. Wash. – $1,396 (84.4%)
9. Sacramento-Roseville-Folsom, Calif. – $1,514 (82.1%)
10. Houston-The Woodlands-Sugar Land, Texas – $1,103 (80.0%)
"With rents continuing to fall and the cost of buying a home remaining high, exacerbated by the rise in mortgage rates in the later half of 2023, renting a home is now a more cost-effective option in all major U.S. markets," said Danielle Hale, Chief Economist at Realtor.com®. "Deciding whether to rent or buy often goes beyond a financial advantage though, and likely depends on a consumer's circumstances. Renters often prize flexibility while the biggest reasons homebuyers cite are that they want a place of their own and to be closer to family and friends. The financial scales have tipped monthly costs in favor of renting over buying, but it does not bring the benefit of housing wealth gains over time that owning does and movers should consider their long-term housing plans and personal situation as they make this decision."
The overall advantage of renting continues to grow in most markets
In February, the cost of buying a starter home in the top 50 metros was $1,027 (60.1%) higher than renting one; comparatively, the cost to buy was $865 higher than renting in February 2023 – a $162 higher monthly savings from renting compared to the prior year. The savings are mostly driven by declining rent prices and higher buying costs, especially interest rates – the 30-year fixed mortgage rate remained elevated at 6.78% in February 2024 compared to 6.26% 12 months ago.
The advantages of renting have become more pronounced across the top metros. Looking specifically at the top 10 metros that favor renting over buying, the average monthly costs for buying a starter home were $1,950 (95.6%) higher than rents – nearly double the cost. Those metros are mostly markets with a higher concentration of tech workers and high earners, where both the average rent and buy costs are higher than the national average.
Renting beats buying in all major metros, especially in south and west; five metros flip from last year
In February, median rents fell across all unit sizes. Despite seven months of annual rent declines, median rents are still $252 (17.3%) higher than the same time in 2020, before the onset of the pandemic. Last February, 45 metros favored renting, but over the past 12 months Memphis, Tenn, Birmingham, Ala., Pittsburgh, St. Louis and Baltimore metros flipped from favoring buying to favoring renting. Four out of five of those markets were among the top markets seeing a high share of investor activity, which may have accelerated the growth of home prices there and increased the overall costs of buying a home, tilting those markets further toward favoring renting over buying.
Austin, Texas, where the monthly cost of buying a starter home was $3,695 – 141.5% more than the monthly rent of $1,530, for a monthly savings of $2,165 – topped the list of markets most favoring renting. Other top markets favoring renting over buying were Seattle, Phoenix, San Francisco and Los Angeles. Metros with diminishing rental advantages were San Jose, Calif.; Dallas; San Francisco; Columbus, Ohio; Miami; and Minneapolis.
Methodology
Rental data as of February 2024 for studio, 1-bedroom, or 2-bedroom units advertised as for-rent on Realtor.com®. Rental units include apartments as well as private rentals (condos, townhomes, single-family homes). We use rental sources that reliably report data each month within the top 50 largest metropolitan areas. Realtor.com® began publishing regular monthly rental trends reports in October 2020 with data history stretching back to March 2019.
The monthly cost of buying a home was calculated by averaging the median listing prices of studio, 1-bed, and 2-bed homes, weighted by the number of listings, in each housing market. Monthly buying costs assume a 8% down payment, with a mortgage rate of 6.78%, and include taxes, insurance and HOA fees.
With the release of its January 2024 rent report, Realtor.com® incorporated a new and improved methodology for capturing and reporting more comprehensive rental listing trends and metrics. The new methodology is expected to yield a cleaner, more representative and more consistent measurement of rental listings and trends at both the national and local level. The methodology has been adjusted to better represent the true cost of primary housing for renters. Most areas across the country will see minor changes with a smaller handful of areas seeing larger updates. As a result of these changes, the rental data released since January 2024 will not be directly comparable with previous releases and Realtor.com® economics blog posts. However, future data releases, including historical data, will consistently apply the new methodology.
Mark Hoeft ~ 850-525-2765 ~ Mark@TheFloridaCoast.com ~ The Florida Coast Realty Pensacola
Welcome to TheFloridaCoast.com; I would like to introduce myself, my name is Mark Hoeft I am a Florida Real Estate Broker & Owner of The Florida Coast Realty Pensacola LLC in Pensacola, Pensacola Beach, & Gulf Breeze Florida, I also the proud owner of The Florida Coast Realty West Palm & The Florida Coast Realty Destin Florida. It would be my honor to help you find your slice of Florida's beautiful Emerald Coast that you've been searching for. Whether you are looking for your primary home, a second home, or investment property for your Real Estate portfolio on Florida's beautiful Gulf Coast. I specializing in Beach Homes, Condos, and Townhouses. I use my 20 years of knowledge and dedication to hard work to make your real estate transaction as smooth as possible. I've become a leader in buying and selling Pensacola Real Estate, Scenic Gulf Breeze Homes, and Pensacola Beach Condos & Homes. I pride myself in my professionalism and expertise. I've closed over 350 real estate transactions and have totaled more than $40,000,000.00 in sales during the past 20 years.
friDAY, APRIL 26, 2024
Died
John Wilkes Booth (assassin of President Lincoln, was shot by federal troops at a farmhouse near Washington, D.C.) – 1865
Eduard Suess (geologist) – 1914
Count Basie (jazz orchestra leader) – 1984
Lucille Ball (actress) – 1989
Mason Adams (actor) – 2005
Phoebe Snow (singer ) – 2011
George Jones (country music singer) – 2013
Advice of the DaY
Repel raccoons with dog hair, human hair, or mothballs.
Events
William Shakespeare baptized– 1564
Meteorites fell on the town of L’Aigle, France– 1803
First U.S. weather report broadcast, by WEW in St. Louis, Missouri– 1921
America’s first guide dog for the blind, a German Shepherd named Buddy, was teamed up with its owner, Morris S. Frank– 1928
The first international satellite, Ariel 1, was launched from Cape Canaveral– 1962
A herd of buffalo got loose and wandered around an upscale neighborhood in Maryland, disrupting traffic and alarming homeowners before police officers managed to corral them in a tennis court– 2005
Five explorers reached the North Pole, setting a world record by coming in several hours earlier than a 37-day trek by American explorer Robert Peary for the same journey in 1909– 2005
Boston Red Sox outfielder Jacoby Ellsbury stole home. This was the first straight-steal of home plate by a Red Sox player since Billy Hatcher in April of 1994.– 2009