Too good to give up

Green Escrow Services | American economy

Mortgage rates have been high – close to 7% – for the last two years. This, of course, has slowed the housing market but the main factor that has kept movement at a standstill is that 70% of existing mortgage holders have a rates that are more then three percentage rates below the current rate.

This means that those thinking of relocating for better jobs or pay, those looking for more space or those looking to downsize aren’t going anywhere anytime soon.

It’s estimated that low locked-in rates are worth close to $50,000 to the average mortgage holder over the life of the loan.

Is it any wonder they’re reluctant to give that up?

Mortgage rates nearing 7%, again

Green Escrow | Real Estate Market News

This wasn’t supposed to happen. After climbing to 7.79% in late October 2023 – the highest rates since 2000 – mortgage rates took a sharp decline and the feeling was this would continue. But it hasn’t, as rates have hit a 2-month high of 6.94%.

So what’s going on?

Analysts say that the economic news in February – a strong labo market and economy – coupled with uneven inflation developments, caused the Fed to take a cautious attitude towards reducing rates.

And the current mortgage rates are the result.

So what’s next?

What to expect when rates drop

Green Escrow | Real Estate News

As we mentioned last week, mortgage rates actually increased slightly, but certainly the trend is downward with rates below 7%. While most analysts expect this trend to continue. they anticipate the decline will be gradual. Some expect mortgage rates to fall to 6% by the end of 2024 and close to 5.75% by the close of 2025.

And, while this is certainly good news for home buyers, it also means that the competition for homes is going to increase. Of course, as demand increases, prices will certainly edge up.

Finally, everyone agrees: if you see a home you love, move fast!

Wait – mortgage rates are going … up?

Green Escrow | Real Estate News

Yes, it was a bit of a surprise: for the week ending February 22, mortgage rates went from 6.77% to 6.9%, for the highest rates of the year.

Analysts say that the slight tick upwards comes as a result of strong economic and labor market conditions mixed in with continued uncertainty over inflation.

The good news is that market inventory continues to rise while home prices have slowed. How this plays out during the spring season remains to be seen.