Mortgage rates keep climbing higher. Over the course of a week, the 30-year fixed rate increased about a quarter of a percentage point. Mortgage rates are moving back towards their 2023 highs.
2024 appeared promising as January and February witnessed a decline in mortgages rates. However, rates moved higher again in February. This development is the latest occurrence in a tempestuous housing market.
The 2024 housing revival is looking less likely. With so many shifting variables, the market is hard to read. Last week’s rate increase complimented a year-to-date record drop in monthly home sales and an inflation surge that could keep rates “higher for longer.” Supply-side constraints are pushing home prices higher, as shown in the chart below. Potential homebuyers are also unsure about how changes in the rules determining real-estate agent commissions will impact prices.
Subsequently, the usually busy spring home-buying season might be a bit quiet. For many, it is cheaper to rent. It is also less of a headache.
Source: Nicole Friedman and Gina Heeb, WSJ
Reade Ben is a policy analyst at the Manhattan Institute.
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