Interesting article from our friends at NAR. I think there are going to be a lot of people regretting their decision to sit on the sidelines while home prices continue to rise!  The interest rate on a 30-year loan has averaged above 7% for four consecutive weeks. It’ll have to come down significantly for most prospective buyers to return to the market, a new survey shows. The magic number for home buyers may be 5.5%. That’s the mortgage rate threshold at which many would-be buyers would jump back into the market, according to a survey from John Burns Research and Consulting. Seventy-one percent of prospective home buyers say they won’t accept a rate on a 30-year mortgage above 5.5%, the survey shows. But it may be a while before rates fall to that point. While the interest rate on the 30-year loan eased to 7.12% this week, it has averaged above 7% for four consecutive weeks, Freddie Mac reports. Higher rates are having a so-called “golden handcuff effect,” discouraging homeowners who locked in low rates a few years ago from selling. This has created an inventory logjam in the housing market. Nearly 82% of home buyers say they feel “locked in” by their existing low-rate mortgage, according to a separate survey from realtor.com®. The inventory crisis, however, has fueled housing competition in spite of higher mortgage rates. Thirty-five percent of homes are fetching more than their asking price due to a limited number of homes on the market, says Jessica Lautz, deputy chief economist at the National Association of REALTORS®. The typical seller is still receiving three offers on their property. “The economy remains buoyant, which is encouraging for consumers,” adds Sam Khater, Freddie Mac’s chief economist. “But while inflation has decelerated, firmer economic data have put upward pressure on mortgage rates, which, in the face of affordability challenges, are straining potential home buyers.” Buyers are being forced to revisit what they can afford. At this week’s 7.12% mortgage rate, a loan for a typical single-family existing home costs $2,221 a month and $1,926 a month for condo buyers, Lautz says. The mortgage payment for a $400,000 home today compared to a year ago is about $259 more per month, Lautz says. Freddie Mac reports the following nationwide averages with mortgage rates for the week ending Sept. 7: - **30-year fixed-rate mortgages:** averaged 7.12%, dropping from last week’s 7.18% average. A year ago, 30-year rates averaged 5.89%.
- **15-year fixed-rate mortgages:** averaged 6.52%, falling from last week’s 6.55% average. A year ago, 15-year rates averaged 5.16%. * * * ### Discover more from Muskegon Real Estate Agent, Chris Simpson,Homes For Sale, Muskegon Homes,Muskegon House For Sale, Muskegon Real Estate, West Michigan Real Estate Agent, Muskegon Realtor Subscribe to get the latest posts sent to your email. Type your email… Subscribe ### Share this: - [X](https://chrissimpsonwestmichiganrealestate.com/2023/09/11/home-buyers-say-this-is-their-magic-mortgage-rate/?share=twitter&nb=1)
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