Home » Economy » Decade-high mortgage rates pose threat to Spring housing market
Decade-high mortgage rates pose threat to Spring housing market
Experts forecast low housing supply through 2024
Macro Trends Advisors founding partner Mitch Roschelle discusses the housing market amid rising inflation and home builders starting to favor selling to investors.
U.S. housing sales are heating up again this spring, but the highest mortgage rates in more than a decade threaten to cool the sales pace that has gripped the market for nearly two years.
Home sales rose last year to the highest level since 2006 as the Covid-19 pandemic changed consumers’ housing priorities and remote work enabled people to move farther from work.
While record-high home prices and record-low inventory of homes for sale have pushed many would-be buyers to the sidelines, intense demand has kept activity at historically strong levels.
Now, with borrowing rates hitting 5% for the first time since 2011, homes may be getting too expensive to keep prices rising so rapidly.
MORTGAGE RATES REACH 5% FOR FIRST TIME IN OVER A DECADE
"We’ve never seen a time where mortgage rates have risen as quickly as they have and the market hasn’t cooled off," said Ralph McLaughlin, chief economist at Kukun, a real-estate data firm. "I don’t expect the market to collapse, by any means, but certainly it’s going to go from a gangbuster market to one that hopefully looks more normal."
The spring is usually the busiest time of the year for home sales. The weather improves, and many families want to move before the start of a new school year. About 40% of annual sales take place from March through June, according to the National Association of Realtors.
EconomyComments Off on Decade-high mortgage rates pose threat to Spring housing market