Did mortgage rates continue their downward trend?
A week really can make a difference. Last Friday, the average lender was seeing mortgage rates that were about as close to the 2022 peak as they could get. Now? We’re comfortably back below 7%.
The national average for a 30-year, fixe rate mortgage continued to slide for the fourth straight day on Thursday. Ending the day down 0.09%, the national average for a 30-year, fixed rate mortgage was down to 6.87%.*
The next big market mover could be the Federal Reserve meeting on July 25th & 26th. Unless other news moves the market, we may continue to hover around the current average for a few days.
Are starter homes a thing of the past?
It’s possible that the idea of a traditional ‘starter home’ may be a thing of the past. Nearly 40% of Americans between the ages of 25 and 44 who bought homes in the past year plan to stay in them for 16 years or more.
In previous generations, it was common to buy a smaller home, build a bit of equity for three-to-seven years, and then upgrade to a ‘forever home’ when more space was necessary. Given the current housing prices and that rates in the 3%-to-4% range aren’t coming back soon, it makes sense for younger folks to feel like they have to stay where they are for the foreseeable future.
However, mortgage rates have started to cool, and several experts are predicting that the housing market will start to slowly loosen over the next few quarters, so there is reason for optimism.
How is Boston trying to solve affordable housing?
Faced with an abundance of empty commercial buildings and a lack of affordable housing, the city of Boston is offering tax incentives to commercial building owners willing to convert their spaces into residential housing. The goal is to increase foot traffic in the downtown areas and provide affordable housing.
Boston Mayor Michelle Wu was quoted as saying, “One building could potentially create hundreds of new housing units that could include a lot of affordable units. Every little bit helps in our housing crisis.”
Applications for the program can be submitted this fall, and will offer a 75% reduction for residential units for up to 29 years. Eligible projects must meet zoning and other standards involving affordable units and energy efficiency. These units will also have to begin construction by October 2025.
* National average rates accurate as of 7/13/23 from MortgageNewsDaily.com and are not advertised rates from Guaranteed Rate.
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