Finance
Mortgage rates barely budged this week as more listings flood the market
Mortgage rates for 30-year mortgages rose to 6.78% from 6.77%. (iStock )
Mortgage rates this week have held steady for the most part. Rates for 30-year mortgages average 6.78% as of July 25, Freddie Mac reported. This is up only slightly from last week’s 6.77%. Last year, rates were in a similar place, averaging 6.81%.
“Mortgage rates essentially remained flat from last week but have decreased nearly half a percent from their peak earlier this year,” Freddie Mac Chief Economist Sam Khater said. “Despite these lower rates, buyers continue to pause, as reflected in tumbling new and existing home sales data.”
Rates on 15-year, fixed-rate mortgages also rose slightly. Averaging 6.07%, these rates rose from 6.05%. A year ago, 15-year mortgages were a bit higher at 6.11%.
Homebuyers that want to see what kind of loan term and rates would work for them can take advantage of Credible’s free online tools to find their personalized rate in minutes.
THE AVERAGE DOWN PAYMENT FOR THE TYPICAL US HOME REACHES $127,750: ZILLOW
Listings are outpacing home sales
Sellers are tired of waiting for mortgage rates to drop drastically, causing a rise in listings the market hasn’t seen in a few years. The rate lock effect that was holding sellers in place is slowly releasing, creating more options for buyers.
Compared to last year, there was a 30% increase in home listings, according to Fannie Mae. An uptick in listings hasn’t led to more home sales, however. Sales are down overall compared to this time last year.
High home prices have been sticking around for years now, causing many buyers to be pickier about their options. Experts predict that the market will moderate soon, so many prospective buyers are now holding out until prices drop.
“The housing market continues to wait for affordability to improve, even as the supply of new and existing homes for sale slowly rises,” said Doug Duncan, Fannie Mae senior vice president and chief economist.
“The slight decline in mortgage rates of late, following data pointing to gradually slowing economic growth, has not been enough to overcome the significant affordability constraints imposed on would-be homebuyers,” Duncan said. “As such, despite more homes being listed for sale, actual home sales have not picked up.”
The housing market varies greatly depending on where buyers are located, so markets in certain areas of the country still remain tight, and likely will for a while.
“We continue to expect home price growth on a national level to decelerate – but remain positive – over the near term, but it should be noted that conditions often vary by region, particularly as it relates to supply,” Duncan said. “For instance, many Sunbelt metros are currently seeing significant increases in for-sale inventories, in part due to new construction, while supply in much of the Northeast and Midwest remains extremely tight.”
If you’re looking to purchase a home in today’s market, you can explore your mortgage options by visiting Credible to compare rates and lenders in minutes.
MANY HOMES ARE SITTING STAGNANT ON THE MARKET, CAUSING MORE FREQUENT PRICE DROPS
Buyers looking for a deal should focus on the Midwest
Much of the country remains in a state of unaffordability, but there are select areas where prices haven’t reached all-time highs. The Midwest is one of the more affordable areas, particularly Ohio and Indiana, Realtor.com found.
Ranked number one on Realtor.com’s list for affordability is Fort Wayne, Indiana. The city is located near many major hubs, including Chicago, Cincinatti and Detroit.
“Homes priced under $200,000 are in high demand and sell quickly,” Fort Wayne real estate professional David Brough said. “These homes usually have several offers on them.”
Since it’s so close to larger cities, residents of Fort Wayne get the benefits of a large city but the safety of a smaller community.
“You can purchase a very nice home and live in a safe community with lots of things to do, at a low cost compared to other big cities around the country,” Brough said.
The next two cities on Realtor.com’s list are in Ohio: Canton and Akron. Both cities have median home prices in the $250,000 to $270,000 range, making them relatively affordable compared to other markets.
“As buyers contend with still-high home prices and mortgage rates across much of the country, affordable areas in the Midwest have gained popularity,” said Hannah Jones, Realtor.com senior economic research analyst. “Buyers in these markets can take advantage of lower home prices without compromising on job prospects or lifestyle amenities.”
To see if you qualify for a mortgage based on your current credit score and salary, check out Credible where you can compare multiple mortgage lenders at once.
FIRST-TIME HOMEBUYERS ARE OFTEN OVERWHELMED BY UNEXPECTED HOMEOWNERSHIP COSTS: STUDY
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‘The Big Money Show’ co-hosts discuss buy now, pay later spending options and the impact it will now have on your credit score.
Small, everyday purchases like a meal from DoorDash are now able to be financed through eat now, pay later options — a practice that some experts deem “predatory.”
“You’ve got to have enough sense to not follow the urge to finance a taco, okay? You have got to be an adult,” career coach Ken Coleman told “The Big Money Show,” Wednesday.
“This is predatory, and it’s going to get a lot of people in deep trouble.”
RISKS OF BUY NOW, PAY LATER: ‘TICKET TO OVERSPENDING,’ EXPERT SAYS
DoorDash and Klarna are now partnering up to extend buy now, pay later options to consumers. (Reuters, Getty / Getty Images)
Financial wellness experts are continuously sounding the alarm to cash-strapped consumers, warning them of the devastating impact this financial strategy could have on their credit score as some lenders will begin reporting those loans to credit agencies.
Consumers may risk getting hit with late fees and interest rates, similar to credit cards.
“So your sandwich might show up on your FICO score, especially if you pay for it late,” FOX Business’ Jackie DeAngelis explained.
EXPERTS WARN HIDDEN RISKS OF BUY NOW, PAY LATER
Major players like Affirm, Afterpay, and Klarna have risen to prominence at a time when Americans continue to grapple with persisting inflation, high interest rates and student loan payments, which resumed in October 2023 after a pause due to the COVID-19 pandemic.
Ramsey Solutions personal finance expert and ‘The Ramsey Show’ co-host George Kamel discusses the ‘buy now, pay later’ craze and the trend that celebrates the financial benefits of being childless.
“The Big Money Show” co-host Taylor Riggs offered a different perspective, suggesting that company CEOs have a “duty” to attract as many customers as they want.
“Unfortunately for me, this always comes down to financial literacy — which I know is so much in your heart about training people to save now by later,” she told Coleman, who regularly offers financial advice to callers on “The Ramsey Show.”
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Coleman continued to come to the defense of financially “desperate” consumers, arguing that companies are targeting “immature” customers.
“I’m for American businesses being able to do whatever they want to do under the law. That’s fine. But let’s still call it what it is: it’s predatory, and they know who their customers are,” Coleman concluded, “And I’m telling you, they’re talking about weak-minded, immature, desperate people.”
FOX Business’ Daniella Genovese contributed to this report.
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