After the 30-year fixed-rate mortgage skyrocketed to 7.37% in October, the U.S. housing market inched closer to a recession. New and existing sales fell at their fastest pace since 2006, inventory fell in popular markets, and home prices began to drop from unsustainable highs reached during the pandemic.
Now, signs of decelerating inflation are causing financial markets to loosen, and after months of consecutive gains, mortgage rates are falling. The average 30-year fixed mortgage rate dropped to 5.99% on Thursday, the first sub 6% mortgage rate since September 12, 2022, Fortune reports.
Let's be clear: The U.S. housing market remains slumped.
While the economic shock spurred by spiked mortgage rates has weakened, it's still very much here. And those elevated mortgage rates, combined with the Pandemic Housing Boom's 41% run-up in U.S. home prices, leaves affordability strained to a historic degree.
Related Stories
Builders
Home Builders Remain Optimistic Despite Market Headwinds
Buyers are retreating as mortgage rates rise, but home builders are looking ahead to strong growth in the new-home market in 2023
Financials
How the Silicon Valley Bank Failure Could Affect the Housing Market
The collapse of Silicon Valley Bank last Friday led to two other bank closings that rattled the tech industry and the cryptocurrency market. Could panic in the financial markets affect the real estate sector?
Affordability
Will Home Prices Bottom Out in 2023?
Soaring mortgage rates are forcing sellers to lower their asking prices in order to attract budget-conscious buyers, and with more rate hikes on the horizon, home prices are falling quickly
