US Housing Split Deepens as 30-Year Mortgage Rates Hit 7.4%
Updated
Updated · CNN · Oct 15
US Housing Split Deepens as 30-Year Mortgage Rates Hit 7.4%
3 articles · Updated · CNN · Oct 15
Summary
Higher mortgage costs are widening a K-shaped housing market, with buyers earning $100,000 or more increasingly driving transactions while lower-income households struggle to qualify or afford monthly payments.
Freddie Mac put the average 30-year fixed rate at 7.4% this week, up from 6.27% a year earlier, as bond yields climbed on expectations of further Federal Reserve rate hikes.
Mortgage demand is already weakening: applications fell 16% from a year earlier, and brokers in Los Angeles said rate-sensitive borrowers are stepping back while cash buyers remain more active.
Cash sales made up 27% of September transactions, and agents said rates moving above 7% late last month briefly lifted deal cancellations as borrowers hit a psychological affordability barrier.
Builders may offer one of the few affordability outlets, with the median new-home price at $393,700 in August versus $417,500 for existing homes in September, helped by incentives such as rate buydowns.