Mortgage rates increased by 20 basis points in the week ending October 10, representing the largest weekly rise since April. Lawrence Yun, chief economist at the National Association of Realtors, joined Wealth! to discuss the implications of this trend for the housing market.
Yun underscores a crucial point: the Federal Reserve does not have direct control over mortgage rates. He clarifies why many consumers were surprised by the recent rise in rates, despite the Fed’s decision to cut rates in September. “It’s the broader bond market, not the Fed, that influences mortgage rates,” Yun explains. Despite the latest uptick, he assures that current rates remain “measurably lower” than those observed in the spring and are also lower than year-over-year figures. He suggests that a 6% mortgage rate may become the “new normal.”
In discussing supply and demand in the housing market, Yun points out that inventory levels are “more and more” stabilizing. He notes that life changes—such as job relocations, family dynamics, and other factors—will continue to drive individuals to buy and sell homes, contributing to a gradual rebalancing of market conditions.
Related topics:
