The United States housing market could be given a possible lift as the favored 30-year mortgage rate fell.
The dip is the first that has been seen in the housing market since last month, picking up on the positive signs in the American economy.
Fixed-rate mortgage percentage falls
Homeowners in America have been grappling with a rollercoaster of mortgage payments, with the average rate swinging wildly over the past few years.
Now, at the close of May, the averaged fixed-rate mortgage came in at 6.94%, down from 7.02%. This might seem like a small decline, but coupled with the inflation figures dipping this could be a great sign for U.S. mortgage payers.
The economy has shown signs of stabilization, and as we reported, for the first time, inflation has fallen below 3%. This is a sign that the rising tide lifts all boats, as the rest of the economy and investment areas showed relaxation.
Federal Reserve Chair Jerome Powell is not celebrating just yet as he said “we’ll need to be patient and let restrictive policy do its work.”
Home values surge
Despite American mortgage rates being at their highest for the last twenty years, home values have soared over the past year.
As we covered, the National Association of Realtors (NAR) produced its Quarter 1 earnings report for 2024. This report recorded that more than 90% of homes across the U.S. saw prices rise.
NAR Chief Economist Lawrence Yun said of the reported surge, “The expensive markets in the West, where home prices declined last year, are roaring back. In the current market, rising prices are the direct result of insufficient housing supply not meeting the full demand.”
This lack of supply was also recorded in the NAR’s most recent update, which showed “The median existing-home sales price grew 5.7% from April 2023 to $407,600 – the tenth consecutive month of year-over-year price gains and the highest price ever for the month of April.”
Home sales might have faded, but this gives mortgage payers a much-needed respite, as the average home value has risen across America in 2024.
Image: Ideogram.
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