The housing industry has been on a roller coaster ride of mortgage rates over the past few weeks. Despite multiple volatile drops and increases in the national average, the rise in mortgage rates has been substantial.
Mortgage rates have been heavily influenced by a number of factors, including concerns over inflation, increased consumer spending, and the ongoing supply crunch. Economists have noted that inflationary pressures drive mortgage rates higher, as consumers become more conservative on their spending. Additionally, the low supply of new homes and an increased demand for those homes can lead to prices rising and the mortgage rates to follow.
The rise in mortgage rates has made purchasing a home more expensive. When mortgage rates rise, the cost of borrowing money for a mortgage increases, meaning buyers may not be able to qualify for the same size of loan that they could previously. This can be especially difficult for first-time buyers who are already facing limited finances and rising home prices.
Despite all of this, the market is still doing well. More people are looking to buy as home prices and mortgage rates rise. In the first quarter of 2021, new home sales rose by 55.6%, there was a jump in existing home sales of 14.2%, and an increase of 11.3% in homebuilder confidence. After the roller coaster ride of mortgage rates, the housing market appears to have found a stable footing and is showing positive growth.
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