Are Slower Rate Hikes Enough to Bring Buyers Back to the For-Sale Market?
Buyers are slowly returning to the for-sale market after a slight dip in the 30-year fixed-rate mortgage, but experts say fears of a 2023 recession are still keeping many prospective house hunters glued to the sidelines. The average rate on a 30-year fixed-rate mortgage fell to 6.09% this week, the lowest level in five months after a barrage of consecutive hikes from the Federal Reserve.
Still, Wednesday’s quarter of a percentage point increase marked the eighth jump in the last 11 months, and despite a cooling housing market, high inflation continues to strain Americans in the real estate sector and beyond, The New York Times reports.
Falling mortgage costs “will generally boost demand a little bit because more folks will be able to buy,” said Nicole Bachaud, senior economist at Zillow, a site that estimates home values. But she cautioned that home prices, which have been ticking lower on a monthly basis, remained high because owners who had locked in low rates years ago had little incentive to sell now.