Inflation is hurting lower-income Americans. They're being more cautious with their spending due to higher expenses and debt servicing. On the other hand, affluent consumers continue to spend, leading to a "K-shaped consumer" pattern. Despite high employment, the pressure of rising living costs is taking its toll on lower-income Americans.
The Federal Reserve kept interest rates the same this week, which means borrowing costs like those for credit cards, mortgages, and auto loans will not get any cheaper for consumers. This move crushes hopes that the Fed might start lowering rates this year, which could have relieved the financial strain on households. Instead, only one rate cut is expected later in the year, and even that may not provide much relief since inflation remains high and interest rates are expected to stay at current levels for some time.
Mortgage rates hit 7.17%, the highest in decades. This volatility is making it difficult for buyers and sellers to navigate the market, as rates can significantly impact monthly mortgage payments and affordability. Some buyers are finding ways to adjust to higher rates, but many sales are expected to shift towards the end of May and early June when sellers typically receive better prices.
Mortgage rates have jumped, slowing down home sales. Consider various mortgage types to find the best rates, including fixed-rate, adjustable-rate, FHA loans, and VA loans. To save for a home, park money wisely, automate savings, and maximize savings by cutting expenses. By understanding mortgage options and saving strategies, you can navigate the current real estate market.
Zillow has updated its housing market forecast, predicting a slower 1.9% growth in home values over the next year. This is due to rising mortgage rates, fewer new listings, and a more balanced market. Sales are also expected to slightly decline, but higher-priced homes are seeing increased activity. Despite a stabilizing trend nationally, it's important to assess local market conditions and factors like inventory levels and new home construction to make informed decisions.
The rising cost of houses and high mortgage rates are making homeownership harder to achieve. However, the lack of homes to buy is balancing out these increases. The Federal Reserve will try to lower interest rates, which may help buyers. Additionally, the "build-to-rent" market is becoming increasingly popular. This involves constructing homes that will only be rented out, which provides a more affordable option for many people.
