B4 • Friday, April 19, 2024
THE GARDEN ISLAND
thegardenisland.com
Sluggish start to spring homebuying season sellers generally having an edge on buyers, especially those vying for the most afLOS ANGELES — The fordable homes, which ofspring homebuying season ten fetch multiple offers. is off to a sluggish start as The U.S. housing market home shoppers contend is coming off a deep, 2-year with elevated mortgage sales slump triggered by a rates and rising prices. sharp rise in mortgage Sales of previously occurates and a dearth of homes on the market. Sales of prepied U.S. homes fell 4.3 percent in March from the viously occupied U.S. previous month to a seahomes sank to a nearly 30year low last year, tumbling sonally adjusted annual 18.7 percent from 2022 as rate of 4.19 million, the Nathe average rate on a 30tional Association of Realyear mortgage surged to a tors said Thursday. That’s 23-year high of 7.79 perthe first monthly decline in sales since December and cent, according to Freddie follows a nearly 10 percent Mac. monthly sales jump in FebThe average rate on a 30year mortgage got as low as ruary. 6.67 percent in mid January, Existing home sales also MIKE STEWART / ASSOCIATED PRESS FILE but has been creeping fell 3.7 percent compared higher, reaching 7.1 percent with March last year. The A sign announcing a home for sale is shown in Kennesaw, Ga., on Feb. 1, 2024. this week. When mortgage latest sales still came in rates rise, they can add slightly higher than the 4.16 home shoppers this spring reflects the heightened there were 1.11 million unhomebuying season, tradi- competition many home million pace economists sold homes on the market, hundreds of dollars a shoppers are facing. Conwere expecting, according a 4.7 percent increase from month in costs for borrowtionally the housing marto FactSet. February and up 14.4 perket’s busiest time of the sider, 60 percent of homes ers, limiting how much they A modest pullback in year. purchased in March sold cent from a year earlier, the can afford. mortgage rates early this “Home sales essentially within less than a month of NAR said. That’s still well Mortgage rates have year helped lift home sales remain stuck because (the) hitting the market. And 29 mostly drifted higher in reshort of the 1.7 million in January and February, mortgage rate has been sta- percent of homes sold homes on the market in cent weeks as stronbut rates mostly ticked up ble and inventory is not re- above their initial list price, March 2019, before the pan- ger-than-expected reports in February and March, up from 28 percent in on employment and inflaally rising,” said Lawrence demic. when many of the home Yun, the NAR’s chief econo- March last year, Yun said. The available inventory tion stoked doubt among sales that were finalized “Inventory is simply not at the end of last month bond investors over how mist. last month would have there,” he said. amounted to a 3.2-month soon the Federal Reserve Despite the pullback in taken place. While the supply of supply, going by the curwill move to lower its sales, the national median Mortgage rates have homes on the market rebenchmark interest rate. home sales price climbed rent sales pace. That’s up risen the past three weeks, 4.8 percent from a year ear- mains below the historical Home loan borrowing from a 2.9-month supply in with the average rate on a rates are influenced by sevFebruary and a 2.7-month average, the typical inlier to $393,500. That’s the 30-year mortgage moving supply in March last year. highest median sales price crease in homes for sale eral factors, including how this week above 7 percent In a more balanced market the bond market reacts to for any March on records that happens ahead of the to its highest level since going back to 1999 and spring homebuying season between buyers and sellers, the Fed’s interest rate pollate November, mortgage there is a 4- to 5-month sup- icy and the moves in the 10marks the ninth month in a gave home shoppers a buyer Freddie Mac said row that prices have risen wider selection of properyear Treasury yield, which ply. Thursday. compared to a year earlier. ties to choose from. lenders use as a guide to That shortage of homes The trend is a setback for The latest surge in prices At the end of last month, on the market means home pricing home loans. Alex Veiga AP BUSINESS WRITER
Long-term rate climbs to highest level since late November Alex Veiga AP BUSINESS WRITER LOS ANGELES — Prospective homebuyers are facing higher costs to finance a home with the average long-term U.S. mortgage rate moving above 7 percent this week to its highest level in nearly five months. The average rate on a 30-year mortgage rose to 7.1 percent from 6.88 percent last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.39 percent. 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. “As rates trend higher, potential homebuyers are deciding whether to buy before rates rise even more or hold off in hopes of decreases later in the year,” said Sam Khater, Freddie Mac’s chief economist. After climbing to a 23-year high of 7.79 percent in October, the average rate on a 30-year mortgage had remained below 7 percent 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. But home loan rates have been mostly drifting higher in recent weeks as stronger-than-expected reports on employment and inflation have stoked doubts over how soon the Fed might decide to start lowering its benchmark interest rate. The uncertainty has pushed up bond yields. The yield on the 10-year Treasury jumped to around 4.66 percent on Tuesday after top officials at the Federal Reserve suggested the central bank may hold its main interest steady for a while.
The yield on the 10-year Treasury jumped to around 4.66 percent on Tuesday — its highest level since early November — after top officials at the Federal Reserve suggested the central bank may hold its main interest steady for a while. The central bank wants to get more confidence that inflation is sustainably heading toward its target of 2 percent. Many economists still expect that mortgage rates will ease modestly this year, which could give homebuyers who can’t afford to pay all cash for a home more purchasing power. “The 30-year-fixed mortgage rate could rise for few months to maybe even 7.5 percent before settling back down to 6.5 percent by the end of the year,” Yun said. In January, NAR forecast the average rate would drop to 6.1 percent by year’s end. Economists at Realtor. com also project that the rate could average 6.5 percent by the end of this year. For now, first-time homebuyers who don’t have any home equity to put toward their down payment continue to have a tough time getting into the housing market, though they accounted for 32 percent of all homes sold last month, an increase from 26 percent in February and 28 percent in March last year. That’s still well short of the 40 percent of sales they’ve accounted for historically.