Home borrowing costs have revisited the highs seen in November 2022, with monthly mortgage payments up almost 20% from a year ago.
Additionally, Freddie Mac reports the average 30-year fixed rate mortgage is hovering near 7%, up from 5% seen a year ago. This sizable cost increase has made affordability for buyers a big problem. And for potential sellers with mortgages lower than 5%, there is little incentive to make a move only to take on a new mortgage at a much higher rate.
Home prices remain elevated and have resisted the urge to move lower, despite higher interest rates. A recent report shows that prices have now hit new highs in 30 of the 50 largest markets while several northeastern metros are currently 5-8% above 2022 highs. Scarce inventory in the existing home sale market is the catalyst behind higher prices. New home sale prices continue to decline, which may apply some pressure on existing home prices, should interest rates remain elevated.
Some good news…home equity is just above $16 trillion, with nearly $10.5 trillion of that being ‘tappable equity.’ This highlights the wealth created through home ownership.
And here are some stats from the housing and consumer sector offered by Fannie Mae.
- Mortgage balances were largely unchanged from the previous quarter and stood at $12.01 trillion at the end of Q2 2023.
- Mortgage originations, which include refinances, stood at $393 billion in Q2, representing a $70 billion increase from Q1.
- Total household debt in Q2 increased by $16 billion (0.1%) to $17.06 trillion.
- Credit card balances increased by $45 billion, from $986 billion in Q1 2023 to a series high of $1.03 trillion.
- Auto loans increased by $20 billion to $1.58 trillion.
Bottom line: Regardless of all the numbers and stats, when it comes down to it, people need a place to live and that occurs every day of the week whether it be renting or owning. It’s never a bad time to fulfill the American dream and dive into the pool of homeownership.
Source: Mortgage Market Guide
We are ready to help you find the best possible mortgage solution for your situation. Contact Sheila Siegel at Synergy Financial Group today.