Other indices showed higher mortgage rates this week.
HousingWire’s Mortgage Rates Center showed Optimal Blue’s 30-year fixed rate for conventional loans at 7.20% on Wednesday, compared to 7.07% the previous week. At Mortgage News Daily on Wednesday, the 30-year fixed rate for conventional loans was 7.33%, up from 7.06% the previous week.
Rates should continue to come down from their peaks, as the inflation and the jobs market are cooling, said Bright MLS Chief Economist Lisa Sturtevant.
However, high home prices and growing affordability challenges are the two factors weighing on prospective home buyers, said Sturtevant. She expects a market contraction this fall in the housing sector.
MBA President and CEO Bob Broeksmit is of the same opinion:
“The housing market appears to be stuck heading into autumn, with sales activity likely to stay stagnant until housing inventory increases and mortgage rates decline to more affordable levels,” he said in a statement.
In many markets, renting has become more affordable than owning
The balance between renting and owning in many markets has shifted toward renting as more new apartment construction comes online, noted Sturtevant. Moreover, declining rent prices will likely help move inflation back toward its target in the months ahead, added Realtor.com Chief Economist Danielle Hale.
“Looking ahead, the economy is nearing an inflection point, and mortgage rate volatility may continue until it is clear that the economic landing has actually occurred and we are not seeing a touch-and-go on growth that could reignite inflation,” said Hale.
