Fixed 30-year mortgage rates averaged 4.85% for the week ending October 18th, up from 3.88% one year ago. This translates to a $125 increase in the monthly payment on a typical $210,000 mortgage, or greater impacts on more expensive homes.
At the national level, existing home sales fell 2.1% over the first nine months of the year compared with the same period in 2017, following three years of annual gains. Home prices are sill rising, but at a slower rate, and National Assoication of Realtors chief economist Lawrence Yun expects flat sales and low price increases next year.
Yun attributes this drop in sales to rising mortgage rates, which have thinned the pool of new home buyers across the country. He says the higher rates are “making many people scared,” including first time home buyers and trade-up buyers. As a result, many hot housing markets are now much less competitive for those still determined to buy.
Lisa Huntington-Kinn, a broker with Your Castle Real Estate in Denver, says the market started to sputter in July. Before, houses often drew dozens of bids and routinely sold for above asking price. Now, she says about 30 percent of sellers have had to reduce their list price.
As costs ratcheted higher, “a lot of buyers dropped out,” she says.
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