Just when you thought home prices were headed to the next galaxy, buyer apathy is starting to reverse course. A recent report reveals average home prices declined 0.77% in July. If you’re thinking big deal, think again. This fraction of a percent is the largest one-month price drop in 11 years. And some larger markets out west have seen home prices drop an average of 4-10%. All good news for homebuyers who’d all but given up because of affordability issues. Let’s hope the trend continues.
Student debt relief gives first time homebuyers a boost
President Biden announced he will cancel millions of dollars in student loan debt. It amounts to forgiving $10k for people with federal student loans and up to $20k for Pell Grant recipients. While the relief is not without controversy, it gives young people a chance to get on their financial feet sooner rather than later. According to Business Insider, ‘Forty-seven percent of people with student loan debt said it’s delaying their ability to buy a house because they can’t save for a down payment, and 45% said they don’t think they can get a mortgage.’ If you’re a first-time homebuyer this is the break you’ve been waiting for.
Rates back down
Mortgage rates had been trending up since last Friday. Hit pause, because with the 30-year fixed just inched down to 5.81%. The market is holding its breath as it waits for Fed Chairman Powell’s speech in Jackson Hole on Friday. With inflation pulling back ever so slightly, some dreamers hope the Fed will dial back their interest rate hikes. The harsh reality is, the Fed will keep up their hawkish tone and actions until they wrestle inflation down closer to 2%.
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All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Guaranteed Rate does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error-free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Guaranteed Rate. Guaranteed Rate its affiliates and subsidiaries do not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.
* National average rates as of 8/25/22 are not advertised rates from Guaranteed Rate and are used for informational purposes only.
John Kistner is Guaranteed Rate’s Market Analyst. Market Updates are designed to provide readers with a high-level yet insightful view of how economic news, events and trends affect mortgage rates and the homebuying process.