Anyone looking to venture into the housing market got whacked with another jump in mortgage rates last week. That means a return to any semblance of housing affordability is a long shot for now.
Home affordability indexes released by two separate trade groups earlier this month hit record or near-record lows in the second quarter, indicating a difficult environment for purchasing homes. MORE REAL ESTATE MUST-READS Indeed, assuming a 20% down payment on a $400,000 home, the buyer of a home at last week’s average Freddie Mac mortgage rate would owe roughly $400 more a month than the same week last year.
Such headwinds may have dented existing-home sales in July. Consensus estimates compiled by FactSet foresee previously owned homes having been sold at a seasonally-adjusted annual rate of roughly 4.14 million in July, down from 4.16 million in June. New home sales, a measure of contract signings to buy newly constructed homes, is expected to rise slightly, to 701,000. Data for both are expected on Tuesday and Wednesday, respectively.