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RussianWhen Will Home Prices Be Affordable Again?
Even though the summer homebuying season is officially here, the housing market is still experiencing a winter chill.
The national average 30-year fixed mortgage rate remains elevated compared to last year, with the rate currently at 6.71%, just a few basis points below the year-to-date high of 6.79% reached in early June, according to Freddie Mac. That represented a 40 basis-point jump from a month prior. A basis point is one-hundredth of one percentage point.
Meanwhile, existing home sales remained relatively flat in May, rising 0.2%, according to the National Association of Realtors (NAR).
Housing Market Forecast for July 2023
The buyer-seller stalemate held steady in May thanks to an uptick in mortgage rates and elevated home prices that together continued to perpetuate the housing affordability crisis, as fears of ongoing inflation, bank sector volatility, debt ceiling drama and an impending recession hang in the air.
Mortgage rates have cooled marginally since the Federal Reserve’s June meeting, where it announced a pause in rate hikes. A Fed rate hike has an indirect impact on long-term home loans, such as 30-year, fixed-rate mortgages.
Fed watchers are sensing that recent, stronger-than-expected jobs and personal consumption expenditures data along with still-high inflation could prompt the Fed to move forward with more rate hikes down the line rather than maintaining a prolonged pause.
These circumstances continue to put a strain on the housing market, which remains a mixed bag.