{"id":162701,"date":"2022-08-25T16:57:05","date_gmt":"2022-08-25T16:57:05","guid":{"rendered":"https:\/\/precoinnews.com\/?p=162701"},"modified":"2022-08-25T16:57:05","modified_gmt":"2022-08-25T16:57:05","slug":"housing-market-may-be-slowing-down-but-rents-keep-rising-heres-why","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/housing-market-may-be-slowing-down-but-rents-keep-rising-heres-why\/","title":{"rendered":"Housing market may be slowing down but rents keep rising. Here&#39;s why"},"content":{"rendered":"<p>Mortgage rates jumped higher this week as investors tried to make sense of data that gave mixed signals about the health of the US economy.<\/p>\n<p>The 30-year fixed-rate mortgage averaged 5.55% in the week ending August 25, up from 5.13% the week before, according to Freddie Mac. That is significantly higher than this time last year when it was 2.87%.<br \/>\nAfter starting the year at 3.22%, mortgage rates rose sharply during the first half of the year, hitting a high of 5.81% in mid-June. But since then, concerns about the economy and the Federal Reserve&#8217;s mission to combat inflation have made them more volatile.<\/p>\n<ul><\/ul>\n<p>The combination of higher mortgage rates and the slowdown in economic growth is weighing on the housing market, said Sam Khater, Freddie Mac&#8217;s chief economist. <\/p>\n<ul><\/ul>\n<p><img decoding=\"async\" alt=\"New home sales fall 12.6% in July as rising prices take a toll\" class=\"media__image\" src=\"\/\/cdn.cnn.com\/cnnnext\/dam\/assets\/220823002942-01-houses-under-construction-large-169.jpg\"><br \/>\n&#8220;Home sales continue to decline, prices are moderating, and consumer confidence is low,&#8221; he said. &#8220;But, amid waning demand, there are still potential homebuyers on the sidelines waiting to jump back into the market.&#8221; <\/p>\n<p>Mortgage rates tend to track rates for the 10-year Treasury, which advanced last week. Rates have been swinging up and down in recent weeks as investors digest a slew of data that shows the economy is resilient in some areas and softening in others. All eyes will be on Federal Reserve Chairman Jerome Powell&#8217;s statements at the Jackson Hole Economic Symposium in Wyoming on Friday, said George Ratiu, Realtor.com manager of economic research.<br \/>\n&#8220;Expectations are that he will highlight the central bank&#8217;s commitment to continued monetary tightening for the remainder of the year,&#8221; said Ratiu. &#8220;The Fed&#8217;s continued rate hikes, combined with balance sheet reduction through mortgage-backed securities rolloffs are expected to keep upward pressure on mortgage rates.&#8221; <\/p>\n<ul><\/ul>\n<p>Looking ahead to the remainder of this year, he said, consumers&#8217; confidence and their ability to weather higher prices are key to keeping the US economy moving and avoiding a recession.<br \/>\nThe upside for prospective buyers is that the housing market is offering a growing number of homes with price reductions. But there is also pullback in sellers bringing their homes to market, further reducing already tight housing inventory.<br \/>\nThat is worrying, said Ratiu.<br \/>\n&#8220;Amid clear signs that affordability is curbing demand, some homeowners may fear that they missed the market&#8217;s peak,&#8221; Ratiu said. &#8220;With real estate markets still contending with significant under building, compounded by construction companies slashing single-family starts, the transition toward balance is losing steam.&#8221;<\/p>\n<h3>Mortgage affordability improved over the past month<\/h3>\n<p>After skyrocketing during the first part of the year, new mortgage payments came down slightly in July from June, according to a survey from the Mortgage Bankers Association.<br \/>\nThe national median payment was $1,844 a month in July, down $49 from June, when it was $1,893. However, monthly payments are still up by $461 in the first seven months of the year &#8212; a 33.3% increase since January.<br \/>\nThe relative improvement in affordability in July came as mortgage rates moved slightly lower and the size of loans got smaller, resulting in lower monthly payments.<br \/>\n&#8220;Homebuyer demand has faltered this summer, as lingering economic uncertainty, high inflation, and still-high mortgage rates caused many prospective buyers to delay their home search,&#8221; said Edward Seiler, MBA&#8217;s associate vice president for housing economics and executive director of the Research Institute for Housing America. &#8220;The combination of a strong job market and moderating home price growth could entice some of these buyers to return in the coming months.&#8221;<br \/>\n<img decoding=\"async\" alt=\"How much house can I afford? \" class=\"media__image\" src=\"\/\/cdn.cnn.com\/cnnnext\/dam\/assets\/201119170153-house-for-sale-stock-large-169.jpg\"><br \/>\nStill, the cost of a mortgage is significantly higher than a year ago, reducing a buyer&#8217;s purchasing power. In addition, elevated home prices and inflation are taking a larger chunk of prospective homebuyers&#8217; income.<\/p>\n<ul><\/ul>\n<p>A year ago, a buyer who put 20% down on a median priced $390,000 home and financed the rest with a 30-year, fixed-rate mortgage at an average interest rate of 2.87% had a monthly mortgage payment of $1,294, according to numbers from Freddie Mac.<br \/>\nToday, a homeowner buying the same priced house with an average rate of 5.55% would pay $1,781 a month in principal and interest. That&#8217;s $487 more each month.<br \/>\nSource: <a href=\"https:\/\/edition.cnn.com\/2022\/08\/25\/homes\/mortgage-rates-august-25\/index.html\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Mortgage rates jumped higher this week as<\/p>\n","protected":false},"author":3,"featured_media":162700,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23051],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Housing market may be slowing down but rents keep rising. 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