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This month marked the first time when mortgage rates in the US experienced an upward trend.
Freddie Mac’s latest statement highlights the steady growth in the average rate for a 30-year, fixed loan, standing at a competitive 6.39% this week compared to 6.35% last week.
While certain US cities continue to experience robust buyer demand, the real estate market faces challenges due to high borrowing costs and a shortage of available homes for sale.
These factors are currently constraining purchase activities in multiple markets, leading to a temporary decline in transactions for previously owned homes, reaching a three-month low in April.
Sam Khater, Freddie Mac’s chief economist, highlights the remarkable stability in interest rates over the past few weeks, which can be attributed to the dynamic economic forces at play.
Despite the affordability challenge, prospective homebuyers have admirably adapted to the prevailing rates and maintained their strong pursuit of achieving homeownership.
Financial markets have been experiencing some turbulence due to ongoing discussions surrounding the US debt ceiling, highlighting the urgency among lawmakers to prevent a potential default by June 1 if an agreement is not reached.
While the possibility of a default is slim, Hannah Jones, an esteemed economic data analyst at Realtor.com, emphasizes that as we approach the event horizon without an increase in the debt limit, there is a higher probability of households experiencing the impact of elevated interest rates.
Reference Source: Bloomberg
