Jul 12, 2024, 11:05 AM
Jul 12, 2024, 11:05 AM

Mortgage Rates Decline Amid Rising Inventory, Yet Market Remains Challenging for Buyers

Highlights
  • Freddie Mac reported that the average interest rate for a 30-year fixed-rate mortgage was 6.89% as of July 11, a slight decrease from 6.96% a year ago.
  • Despite the decrease in mortgage rates, home prices have continued to rise.
  • These trends highlight the complexities of the real estate market where lower borrowing costs do not necessarily lead to lower home prices.
Story

Current mortgage rates are showing a downward trend, with the average rate for 30-year mortgages at approximately 6.96%, down from last year’s figures. The 15-year mortgage rate has also decreased to 6.17%, a slight drop from 6.25% the previous week. This decline in rates, coupled with an increase in housing inventory, offers a glimmer of hope for prospective buyers, according to experts. "We’re also seeing more inventory on the market, including a fair number of listings with price cuts," noted Khater, indicating a potentially more favorable environment for buyers. Despite the increase in inventory, home prices continue to soar, reaching an all-time high of $397,482 as of early July, according to Redfin data. While more homes are available, the overall inventory remains historically low, creating a challenging market for many buyers. Julie Zubiate, a Redfin Premier agent, observed that homes are taking longer to sell, which has resulted in some properties being sold for less than expected. A recent ServiceLink study revealed that a significant portion of younger generations are still eager to enter the housing market. Among those surveyed, 63% of Gen Z respondents plan to buy a home in 2024, compared to 59% of Millennials. However, the high average income required to purchase a home—over $100,000—poses a barrier for many, leading nearly 22% of Gen Z participants to pool resources with friends to afford a home. For those interested in navigating the mortgage landscape, resources like Credible can assist in comparing lenders and understanding qualification requirements based on credit scores and income.

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