After the 30-year fixed-rate mortgage skyrocketed to 7.37% in October, the U.S. housing market inched closer to a recession. New and existing sales fell at their fastest pace since 2006, inventory fell in popular markets, and home prices began to drop from unsustainable highs reached during the pandemic.
Now, signs of decelerating inflation are causing financial markets to loosen, and after months of consecutive gains, mortgage rates are falling. The average 30-year fixed mortgage rate dropped to 5.99% on Thursday, the first sub 6% mortgage rate since September 12, 2022, Fortune reports.
Let's be clear: The U.S. housing market remains slumped.
While the economic shock spurred by spiked mortgage rates has weakened, it's still very much here. And those elevated mortgage rates, combined with the Pandemic Housing Boom's 41% run-up in U.S. home prices, leaves affordability strained to a historic degree.
Advertisement
Related Stories
Business Management
How 2023's Housing Market Conditions Are Affecting the 2024 Housing Market
Last year ended on an optimistic note, but persistent headwinds still exist to keep 2024 from getting the housing market back to pre-pandemic levels
Government + Policy
Housing Affordability Becomes Debate Topic in 2024 Presidential Election
Presidential candidates are tackling affordability issues as home price-to-income ratio reaches record high
Economics
Mortgage Rate Declines Could Boost Home Sales Following Months of Low Activity
Encouraging economic news bumped mortgage applications up by 2.6% for the week ending May 3
