By Arlenys Tabare
According to the latest Freddie Mac report for the month of April, it was known that the 30-year fixed reference mortgage rates increased from 6.23% to 6.30%while the reference 15-year mortgage rate was 5.64% compared to 5.58% the previous week.
In this regard, Sam Khater, chief economist at Freddie Mac, commented that “since interest rates had decreased slightly in recent weeks, purchasing demand has accelerated, and Purchase requests have increased by more than 20% compared to the previous year“, said.
For Khater, the demand for home purchases has remained firm in the spring season, also pointing out that, compared to previous years, Potential buyers have reacted positively to mortgage rates as well as increased inventory.
However, Jiayi Xu, an economist at Realtor.com, believes that the market continues to be influenced by external factors such as the conflict in the Middle Eastwhich has caused an increase in inflation due to rising energy prices.
These factors, according to Xu, are important for any buyer’s decision-making. “Despite key decisions and the upcoming leadership transition at the Federal Reserve, Geopolitics is likely to be the predominant ingredient influencing short-term mortgage interest rates“, said.
Although the real estate sector is not directly affected by the decisions made by the Federal Reserve on interest rates, the evolution of 10-year Treasury bonds is a key ingredient.
Xu adds that “After US-Iran peace talks stalled this week, the 10-year Treasury bond rose above 4.3% and surpassed the 4.4% threshold after the Federal Reserve kept interest rates unchanged and expressed concern about global uncertainty linked to tension in the Middle East.”
Keep reading:
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- US Pending Home Sales Surprisingly Increased 1.5% in March
- US mortgage rates fall to 6.30% and ease housing market tensions
