According to Freddie Mac, interest rates on 30-year fixed-rate home loans averaged 6.28 per cent in the week ending 6 April. While this is much higher than a year ago, when rates were 4.72 per cent, it is still down at least a little from the 20-year high reached near the end of last year.
"Compared to the recent 7% average rate peak, the latest rates are saving homebuyers on a $300,000 loan $140 per month," said Lawrence Yun, chief economist for the National Association of REALTORS®, who is optimistic that rates will continue this downward trend.
"While weekly rate changes may fluctuate up and down, the long-term outlook for interest rates is for further improvement, with the distinct possibility of being below 6 per cent by the end of the year," Cloud added.
For homebuyers who have been sitting on the sidelines wondering whether they should jump into the pricey property market this spring, this reprieve should be a relief. So far, however, it's not all good news.
In this week's column, "How's the housing market this week?" we take a look at what the latest statistics mean for homebuyers and sellers.
"This spring has shown a mix of trends for both homebuyers and sellers," notes Sabrina Speianu, Realtor.com® Economic Data Manager, in her analysis.
For starters, listing prices remained higher than last year for the week ending April 1, albeit barely, with an increase of only 4.4%.
"Home listing prices are advancing at the slowest pace since June 2020 and are likely to slow further," Speianu said.
Economists at Realtor.com had previously predicted that prices would fall completely by the summer, and the national median sales price (the price agreed upon by buyers and sellers) has already begun to fall for the first time in more than a decade.
Nonetheless, with list prices hovering at the $428,000 median, "the last week of March and the beginning of April were still above the five most expensive months of 2022," Speianu noted.
Another negative for buyers was that the week ending April 1 marked the 39th consecutive time fewer homeowners listed their homes for sale.
Lower levels of new home listings continue to constrain home sales, which continue to remain at historically low levels," Speianu explained.
While the total number of real estate listings is up 53 per cent compared to a year ago, many of these housing options are stale and have passed. On average, listings are taking 18 days longer than they did this time last year, which continues to indicate that buyers are not impressed with their options. In fact, properties have been idle for longer than 35 consecutive weeks.
However, with temperatures rising and mortgage rates falling, the pace of this slump could accelerate as more homebuyers get out and attend some open houses.
"Expect the time on the market to continue to decrease this spring," Speianu said, "as we head towards the best time of year to sell a home in mid-April." That said, sellers will need to adjust their expectations and pricing to take into account current market conditions."
"Buyer demand tends to be sensitive to changes in mortgage rates, increasing with each cut in interest rates," added Hannah Jones, research analyst at Realtor.com Economist." We can expect a similar bump in housing activity as a result of the recent drop in mortgage rates."
However, Jones noted that "despite these pick-ups in demand, the housing market remains, on balance, unaffordable for many people looking to buy a home."
