Home sales in January fell 8 percent compared to last year, as high mortgage rates and harsh winter weather may have deterred Americans from buying.
Last month, pending home sales fell the most since October, when the cost of borrowing hit a record, according to a monthly report from Redfin.
Although rates have dropped, they still seem high enough to hold off buyers. This week, 30-year fixed mortgage rates were 6.64 percent, according to government-backed lender Freddie Mac.
Although no deals are being made on home purchases, a growing number of Americans are evaluating the market, according to the Redfin report. Between the beginning of the year and February 6, tourist activity increased by 16 percent.
Pending home sales fell 8 percent compared to last year thanks to high mortgage rates and harsh winter weather, according to a Redfin report.
This week, 30-year fixed mortgage rates were 6.64 percent, according to government-backed lender Freddie Mac.
“We’re seeing a bit of a recovery with house hunters touring homes, but even early-stage demand hasn’t picked up as much as we would expect this time of year,” said Chen Zhao, economic research leader at Redfin.
“That’s because mortgage rates are rising again and winter weather has been harsher than usual across much of the country, keeping some house hunters at home.”
And on February 2, mortgage rates rose the most in a single day after the January jobs report showed the United States had added more jobs than expected.
This was interpreted as a sign that the Federal Reserve’s battle against inflation may not be over and that it will likely keep benchmark interest rates high for some time.
Therefore, mortgage rates are also expected to remain elevated in the coming months. Coupled with high housing prices, that means Americans may remain reluctant to buy.
Average monthly mortgage payments are now $2,607, Redfin reported. That’s just about $100 shy of October’s all-time high.
Between the beginning of the year and February 6, tourism activity increased 16 percent, according to the report.
“High mortgage rates nearly paralyzed the local market from August through November, activity rebounded as rates fell a bit in mid-December, and is now slowing again as rates rise,” the broker said in the report. from Redfin, Luis Rojas. .
He suggested that prospective buyers eager to move forward could still find mortgage rates lower than the stated averages.
“I’m warning buyers, especially first-time buyers, that the mortgage rates you see on the news are not the be-all and end-all,” he said.
“Some local lenders are willing to offer interest rates in the 5 percent range for new construction projects because any deal is better than no deal.”