Have you wanted to buy a house recently, only to see the prices and the high mortgage rates and say, 'No thanks?' If you did, you aren't alone. Home sales fell for the ninth straight month as higher mortgage rates make buyers think twice before purchasing a house. According to the National Association of Realtors, home sales dropped 5.9% in October from the month before and are sitting 28.4% lower than this time last year.
As the Federal Reserve hiked interest rates to help curb inflation, which has remained stubbornly high, it's sent mortgage rates soaring. While the average interest rate on a 30-year fixed-rate loan recently eased to 6.61% according to Freddie Mac, rates had been sitting above or near 7% for the last several weeks.
Concerns about future rate hikes have kept investors nervous and markets jittery. Yesterday, policymakers from the Fed spoke about inflation and several struck a more hawkish tone (meaning, wanting to increase interest rates). This caused markets to fall on worries that perhaps, we could get another super-sized hike of 75 basis points at the Fed's next policy meeting in December.
But markets leveled out today, with strong earnings from major retailers including Gap and Ross Stores pointing to consumer resilience heading into the key holiday season, despite higher prices.
- Kristin
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