Mortgage Rates Reach 22-Year High, but Economists Are Optimistic
For the week ending Aug. 24, rates for a 30-year fixed-rate home loan averaged 7.23%, a 22-year high, according to Realtor.com. While the latest uptick continues to erode affordability for prospective buyers in the for-sale market, housing experts such as Realtor.com economist Jiayi Xu say those rate hikes could decelerate in a cooler fall market.
After 11 interest rate hikes meant to tame inflation in the U.S. economy, experts say the Federal Reserve may take its foot off the gas pedal after its next meeting in September. Though smaller rate hikes could offer some relief to cost-burdened buyers, median list prices continued to climb in August but aren’t likely to hit the record-high median of $449,000 reached last June.
Buyers struggling with high mortgage rates and home prices can at least take comfort in knowing that they don’t have to rush to the closing table these days.
For the week ending Aug. 19, homes spent four extra days on the market compared with this time last year. This marks 57 weeks in a row that the time a typical home has been on the market is up year over year.
Yet the gap between how many days a home spent on the market in 2022 compared with 2023 is shrinking.
“By fall, we could even see homes selling faster than one year ago,” adds Xu.