Housing Market Gets Hit as Mortgage Rates Skyrocket Ahead of Midterm
Summary
The U.S. housing market declined in September as mortgage rates rose sharply, slowing down home sales. Rising borrowing costs have made buying homes less affordable, adding economic worries ahead of the midterm elections.Key Facts
- Pending home sales fell 7.3% from August and 11.3% from a year ago in September.
- Mortgage rates rose from about 6.8% at the start of September to 7.6% by the end of the month.
- The median price of existing homes reached $417,500 in September, a record high for that month.
- President Donald Trump promised to lower borrowing costs during his 2024 campaign, but mortgage rates have increased instead.
- Freddie Mac’s average 30-year mortgage rate hit 7.40% in early October, the highest since November 2023.
- The National Association of Home Builders reported the lowest homebuilder sentiment in 14 years due to high mortgage rates and construction costs.
- Housing inventory rose to 1.60 million homes, the highest since November 2019, meaning more homes are available but fewer are being sold.
- Inflation and other economic factors are expected to keep mortgage rates high for the near future.
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