The housing market and all of the uncertainty plaguing it is undoubtedly on the minds of prospective buyers, sellers and investors.
As the Federal Reserve continues to try to curb inflation through the increase in rates, its been indirectly driving up the cost of the home loan that 90% of buyers obtain — the 30-year fixed-rate mortgage. The average 30-year fixed rate mortgage in the U.S. climbed to 6.82% as of Sept. 29 — more than double what it was on Sept. 30, 2021, when the average rate was at 3.01%.
As a result, there is a growing affordability crisis plaguing potential homebuyers because the average monthly payment has increased by over 50% since last year. This month, mortgage interest rates hit a high not seen since the 2008 housing crash.
See also: Investors Earned A 41% Return On This Real Estate Debt Investment
Due to the rate increase and the still historically high home and listing price values, the market is starting to see a decline in demand and an increase in supply.
According to the National Association of Realtors, “Existing sales fell for the sixth consecutive month in July. Sales dropped 5.9% from June and 20.2% from a year ago.”
According to Realtor.com, “The supply of homes for sale is growing, up 27% at the start of September compared with the same time a year ago.”
While housing prices and home values were at historical highs last year, historically low interest rates allowed buyers to be able to afford purchases. Now, the market is…
