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<ul class="summary-list"><li>The Fed's interest rate hikes in an attempt to cool inflation have led to a spike in <keyword id="12998456" type="UNKNOWN" weightage="60" keywordseo="mortgage-rates" source="Orion">mortgage rates</keyword>. </li><li>An expert says rates are likely to hover around 5% through the end of 2023. </li></ul>The <keyword id="11895523" type="UNKNOWN" weightage="60" keywordseo="federal-reserve" source="Orion">Federal Reserve</keyword>'s <a href="https://www.businessinsider.com/fed-raises-interest-rates-may-double-sized-hike-mortgages-loans-2022-5">interest rate hikes</a> in an attempt to cool inflation have increased the costs on car loans, credit card debt, and <a href="https://www.businessinsider.com/personal-finance/average-mortgage-interest-rate">mortgage rates</a>.Although rate growth has slowed in the past few weeks, <a href="https://www.businessinsider.com/personal-finance/mortgage-calculator">mortgage rates</a> are still trending well above levels seen in the pandemic's early days. It's contributed to declining affordability in the housing market, and economists expect higher rates to stick around for at least another year. According to <keyword id="12650894" type="UNKNOWN" weightage="60" keywordseo="freddie-mac" source="Orion">Freddie Mac</keyword>, the average US fixed rate for a 30-year <keyword id="12212082" type="UNKNOWN" weightage="60" keywordseo="mortgage" source="Orion">mortgage</keyword> came in at 5.30% this week, declining from 5.70% the previous week but still a tremendous increase from a pandemic low of 2.68% in December 2020. The average rate on 15-year mortgages fell to 4.45%, down from the prior reading of 4.83%. However, the rate is still significantly higher than the 2.20% borrowers were dealt during the same time period in 2021. Rate hikes coupled with soaring home prices have <a href="https://cdn.nar.realtor/sites/default/files/documents/hai-03-2022-housing-affordability-index-2022-05-06.pdf">plummeted</a> <keyword id="11957056" type="UNKNOWN" weightage="60" keywordseo="housing-affordability" source="Orion">housing affordability</keyword> by 29% over the last year — representing the steepest annual decline on record. As borrowers feel the sting in their wallets, many Americans are yearning for yesteryear. Lien Kiefer, an economist at Freddie Mac, told Insider that predicting rate activity is a difficult task as movement depends on the economic health of financial markets. However, he believes mortgage rates aren't likely to spike in the next few weeks — but borrowers shouldn't expect a return to lows seen during the onset of the pandemic. "Rate movement depends on Federal Reserve policy and how the market anticipates that, so it makes forecasting incredibly difficult," he said. "Given all the volatility in the market, it's hard to say how rates will behave week to week. But the risks are kind of balanced — I don't think they'll move dramatically higher or lower."That means borrowers could see mortgage rates hover around 5% well into 2023. A <a href="https://www.bloomberg.com/news/articles/2022-06-14/traders-and-economists-clash-on-fed-rate-cut-timing">Bloomberg poll of economists</a> in mid-June found they expect the Federal Reserve to cut interest rates in late 2024.In the meantime, while today's rates may be a substantial increase from 2020's rate environment, rates are still fairly low compared to prior <a href="https://www.rocketmortgage.com/learn/historical-mortgage-rates-30-year-fixed">historical levels</a>."From a longer term historical perspective, mortgage rates are still relatively low," Kiefer said. The reason it may seem like they're extremely high now is due to the sudden and dramatic drop experienced during 2020. At that time, the Federal Reserve <a href="https://www.housingwire.com/articles/fed-announces-unlimited-purchases-of-mbs-and-treasuries-adds-multifamily-mortgages/">purchased</a> large amounts of treasuries and mortgage bonds to help stabilize the <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword>. It resulted in the 30-year fixed-rate mortgage falling from 4.6% at the end of 2018 to an all-time low of 2.70% at the end of 2020. The abrupt decline was rare as <a href="https://www.freddiemac.com/research/insight/20220609-what-drove-home-price-growth-and-can-it-continue">data</a> from Freddie shows a plummet in rates has only happened twice before in the past 20 years — in 2003 and after the <a href="https://www.businessinsider.com/what-is-housing-bubble-will-us-real-estate-market-crash-2022-4">housing crash</a> in 2009. During those time periods, home price growth experienced <a href="https://www.freddiemac.com/research/insight/20220609-what-drove-home-price-growth-and-can-it-continue">upward trajectories</a> similar to price appreciation seen in the Covid-19 housing market. "I was not anticipating that we would see such low rates in 2020," Keifer said. "It's certainly a possibility we learned from the last couple of years that there are lots of surprises in store."While he does not forecast a return to 2020's rate environment in 2022 or 2023, he says never say never in regards to the future. "I would not be totally shocked if in the next five years we were to hit a new low," he said. "But certainly most forecasts and economists are expecting that we won't reach that low in the near term."

Mortgage rates aren't likely to fall again until late 2023 — at the earliest

<ul class="summary-list"><li>The average US fixed rate for a 30-year mortgage rose to 5.22% this week — up from 4.99% one week prior. </li><li>Mortgage rates have seesawed many times in 2022.</li></ul>Over the last few years, historically low mortgage rates have enticed millions of Americans to purchase homes.But pandemic-era mortgage deals are over and rates have been stuck on a proverbial see-saw for weeks.The average US fixed rate for a 30-year mortgage came in at 5.22% this week, Freddie Mac reported in its weekly mortgage market survey. The rate soared from last week's reading of 4.99% and is a tremendous increase from a pandemic low of 2.68% in December 2020. "The 30-year fixed-rate went back up to well over five percent this week, a reminder that recent volatility remains persistent," Sam Khater, the chief economist at Freddie Mac, told Insider. Mortgage rates have been fluctuating as the Federal Reserve attempts to cool inflation by raising interest rates. Rate hikes coupled with soaring home prices have made <a href="https://cdn.nar.realtor/sites/default/files/documents/hai-03-2022-housing-affordability-index-2022-05-06.pdf">housing far less affordable</a> for many would-be buyers, leading many to wonder when mortgage rates will stabilize. But as volatility in the economy seeps into the real estate market, they could be waiting for a while.Len Kiefer, an economist at Freddie Mac, told Insider that's because mortgage rates depend largely on inflation as well as economic activity in the US and global financial markets — and right now the <a href="https://www.imf.org/en/Publications/WEO/Issues/2022/04/19/world-economic-outlook-april-2022#:~:text=Global%20growth%20is%20projected%20to,percent%20over%20the%20medium%20term.">outlook</a> looks bleak."Inflation has a big impact on the Treasury market, which is sort of the linchpin that's driving a lot of the activity," he said. The Treasury market is a key component of US and global financial systems. <a href="https://www.businessinsider.com/personal-finance/treasury-bonds">Treasury bonds</a> are perceived as a predictable investment and are guaranteed by the US government. However, soaring inflation coupled with aggressive increases in the Fed's overnight funds rate — a measure of bank funding costs — has resulted in higher Treasury yields this year. Kiefer says it has helped to influence mortgage rate volatilit."The money that the bank or the lender is going to provide a consumer comes from loans that are securitized in the secondary market, so that means they are looking at what investors in that market are looking at, which is often the 10-year Treasury yield," Kiefer said."What is happening in the Treasury market is going to influence the funding costs for mortgage-backed securities investors," he said. If something results in higher yields on Treasuries or MBS, lenders will respond with higher rates for consumers, he added.Kiefer says this ultimately influences the costs a borrower will pay for their mortgage. "There's a lot of uncertainty around the path of inflation and the overall economy and as views on that change, market participants adjust and that affects the pricing on Treasuries, which then passes through to the mortgage market." According to Kiefer, this is the crux of mortgage rate volatility."I would expect that we may continue to see some volatility throughout the rest of this year as expectations and market conditions evolve," he said. "We very well could see <a href="https://www.businessinsider.com/mortgage-rates-poised-to-fall-bank-of-america-2022-8">rates come down</a> from where they are, but they could also very easily go up quite a bit."In June, the average US fixed rate for a 30-year mortgage nearly reached 6%, according to <a href="https://www.freddiemac.com/pmms">data</a> from Freddie Mac. As rates rise, buyers of a median-priced home are now looking at monthly mortgage payments that are <a href="https://www.businessinsider.com/mortgage-rates-real-estate-slow-down-effects-renters-buyers-6-2022-6">more than $400 higher than</a> they were just a year ago.

Why mortgage rates are fluctuating so much in 2022

<ul class="summary-list"><li>The US <keyword id="11916125" type="UNKNOWN" weightage="60" keywordseo="housing" source="Orion">housing</keyword> market is entering its worst period of decline since 2006, before the subprime crisis. </li><li>A <keyword id="12650894" type="UNKNOWN" weightage="60" keywordseo="freddie-mac" source="Orion">Freddie Mac</keyword> economist said <keyword id="12212082" type="UNKNOWN" weightage="60" keywordseo="mortgage" source="Orion">mortgage</keyword> applications will see a steep drop over the summer. </li></ul>An already punctured US housing market is set to deteriorate to levels witnessed in 2006, a Freddie Mac economist <a href="https://twitter.com/lenkiefer/status/1534866789582217217?s=20&amp;t=KRxRFaqGDvDYb6JPhBMOwA">tweeted</a> Thursday. "The U.S. housing market is at the beginning stages of the most significant contraction in activity since 2006. It hasn't shown up in many data series yet, but mortgage applications are pointing to a large decline over summer. Purchase apps down 40% from seasonally adjusted peak," Len Kiefer said. He added that during the coronavirus pandemic, mortgage applications also dramatically fell, but they picked back up shortly after. That situation is unlikely in the current state of the US economy. "During COVID in spring of 2020, applications also fell 40% but came roaring back in short order," Kiefer <a href="https://twitter.com/lenkiefer/status/1534866793969459205">said</a>. "Such a rebound is unlikely in the current environment," he added. It largely boils down to the Federal Reserve <a href="https://www.businessinsider.com/fed-raises-interest-rates-may-double-sized-hike-mortgages-loans-2022-5">raising interest rates</a> to tame soaring <keyword id="11894140" type="UNKNOWN" weightage="60" keywordseo="inflation" source="Orion">inflation</keyword>. As consumer prices surge, the Fed has deployed more aggressive monetary policy, lifting the benchmark interest rate to 0.5 percentage points last month in its first double-sized rate hike and is set for a series of similar-sized increases this year.That, in turn, has subsequently <a href="https://www.businessinsider.com/afford-to-buy-a-home-real-estate-housing-crisis-prices-2022-6">priced out potential homebuyers</a>, as higher home prices and escalating mortgage rates reduce buyer affordability. And with the US economy predicted to enter a recession in the next year, and inflation at a forty-year high, American homeownership is likely to get harder.The National Association of Realtors has said <keyword id="11957056" type="UNKNOWN" weightage="60" keywordseo="housing-affordability" source="Orion">housing affordability</keyword> <a href="https://cdn.nar.realtor/sites/default/files/documents/hai-03-2022-housing-affordability-index-2022-05-06.pdf">tumbled</a> a record 29% over the last year - the steepest annual decline on record - as mortgage rates and housing prices shoot upwards. One economist even said US mortgage applications are in <a href="https://markets.businessinsider.com/news/bonds/us-house-prices-mba-mortgage-applications-falling-meltdown-interest-rates-2022-6">"meltdown"</a> as borrowing costs soar. In the week leading up to June, the Mortgage Bankers Association said that applications for new purchases fell at a 52% annualized rate, compared to the previous three months. "A meltdown, in other words," Pantheon Macroeconomics chief economist Ian Shepherdson said. A separate <a href="https://www.fanniemae.com/research-and-insights/surveys-indices/national-housing-survey">survey</a> echoed gloomy buyer sentiment and recorded that about 80% of respondents say it's never been a worse time to buy a home."Consumers' expectations that their personal financial situations will worsen over the next year reached an all-time high in the May survey, and they expressed greater concern about job security," Doug Duncan, senior vice president, and chief economist at Fannie Mae, said in a <a href="https://www.fanniemae.com/research-and-insights/surveys-indices/national-housing-survey">statement</a>.

The US housing market is seeing its worst contraction since 2006 as mortgage applications crumble, says Freddie Mac economist

<ul class="summary-list"><li>Experts forecast a possible <keyword id="12460783" type="UNKNOWN" weightage="60" keywordseo="recession" source="Orion">recession</keyword> in 2023.</li><li>A downturn in the <keyword id="11893570" type="UNKNOWN" weightage="100" keywordseo="economy" source="Orion">economy</keyword> would hit a <keyword id="11957054" type="UNKNOWN" weightage="60" keywordseo="housing-market" source="Orion">housing market</keyword> that's been running hot for years. </li></ul>The US economy is in a strange place– and that means the housing market is too. As rising <keyword id="6371181" type="UNKNOWN" weightage="60" keywordseo="interest-rates" source="Orion">interest rates</keyword> do their job to tamp down demand, fears of a coming recession are on the rise. Prospective buyers may be wondering what it all means for their dreams of owning a home.In short, price growth will likely slow down as demand falls, and <keyword id="12998456" type="UNKNOWN" weightage="60" keywordseo="mortgage-rates" source="Orion">mortgage rates</keyword> have begun to edge lower after soaring earlier this year. But with a persistent lack of available homes for sale, an economic slowdown won't bring a new era of affordability to the US housing market.<h2>A recession could hit in 2023 — but it will likely be mild</h2>Though there are <a href="https://www.businessinsider.com/job-openings-jolts-april-labor-shortage-hiring-recovery-economic-data-2022-5/">plenty of jobs</a> to go around, <a href="https://www.businessinsider.com/wage-growth-eci-q1-labor-shortage-job-market-hiring-raises-2022-4">wages are rising</a>, and <a href="https://www.businessinsider.com/americans-hate-the-economy-but-theyre-still-spending-big-2022-5">spending is booming</a>, some Americans are having a tough time.Inflation has climbed to a forty-year high while consumer sentiment has fallen to a decade low. Rising interest rates have also made <a href="https://www.businessinsider.com/fed-raises-interest-rates-may-double-sized-hike-mortgages-loans-2022-5">all forms of borrowing</a> from car loans to mortgage payments more expensive than they were just a few months ago. As the economy falls further out of whack, fear of a possible recession is spreading. And while experts believe it's unlikely to happen in 2022, signs do <a href="https://www.businessinsider.com/next-recession-outlook-mild-inflation-cooldown-federal-reserve-economic-recovery-2022-5">point</a> to an economic downturn in 2023."Financial conditions have tightened significantly, and the economy is slowing faster than previously expected as markets adjust to the Federal Reserve's tightening guidance," Doug Duncan, senior vice president and chief economist at Fannie Mae, <a href="https://www.fanniemae.com/newsroom/fannie-mae-news/rapidly-rising-rates-and-persistent-inflation-further-soften-economic-outlook">said</a> in a statement referring to the Fed's interest rate hikes that began in March in an attempt to cool sky-high demand throughout the economy.<h2>Home prices will likely continue to grow in most markets, but at a slower pace</h2>If a recession is on the horizon for 2023, it could mean the housing market is bracing for a cool down after years of hot demand driving prices higher — but that doesn't mean homeownership will become more affordable for prospective buyers. "If the economy were to weaken or a recession were to hit, that would further weaken demand," Len Kiefer, the chief economist at Freddie Mac, told Insider, adding that it could lead to a deceleration in price growth. Although home prices have actually <a href="https://www.businessinsider.com/top-15-cities-seeing-the-biggest-home-price-cuts-2022-4">declined</a> in some markets, they're still rising in other parts of the country — but at a much slower rate. While price growth is expected to slow further, Kiefer says that doesn't mean prices will go down. "We expect house price growth to moderate over the summer," Kiefer said. "However, we still expect house price growth to remain positive. That means that coupled with higher mortgage rates homebuyer affordability will be stretched even further." <h2>The rock-bottom mortgage rates of the pandemic era are gone</h2>Pandemic-era mortgage deals are <a href="https://www.businessinsider.com/rising-rates-and-low-supply-pushes-affordability-to-new-lows-2022-2">over</a> and it's making homeownership more costly. Although mortgage rates <a href="https://www.freddiemac.com/pmms">fell slightly</a> in May, they are much higher than they were in 2021. According to Freddie Mac, the average U.S. fixed rate for a 30-year mortgage fell to 5.10% last week, from a <a href="https://freddiemac.gcs-web.com/news-releases/news-release-details/mortgage-rates-continue-increase-0">pandemic high</a> of 5.30% — but that's significantly up from a pandemic low of 2.68% in December 2020.As mortgage rates put <a href="https://www.businessinsider.com/as-homeowners-stay-put-us-housing-inventory-remains-lackluster-2022-4">additional pressure</a> on housing costs, buyers of a median-priced home are looking at monthly mortgage payments that are more than $400 higher than a year ago. <h2>There still aren't enough houses on the market to meet demand</h2>With rates generally on the rise and inflation putting pressure on everyday costs, Americans are likely to have a harder time affording housing — let alone a new home purchase in 2023. "Not only is the worsening affordability of homes a problem for potential entry-level <keyword id="13210307" type="UNKNOWN" weightage="60" keywordseo="homebuyers" source="Orion">homebuyers</keyword>, but current homeowners are less likely to trade in their existing lower-rate mortgages and list their homes for sale, both of which will likely weigh on sales," Duncan said.To boost housing market equilibrium, home prices will need to fall — and that means more homes will need to be built in 2023. "Cooling of the market is necessary to bring supply and demand back into balance," Kefer said. "The rate of house price growth over the past two years is not sustainable over the long run."Even with more new listings hitting the market, the number of homes for sale are still at <a href="https://www.businessinsider.com/why-theres-a-housing-shortage-not-enough-homes-high-prices-2022-5">historic lows</a>. To address home price growth and the nation's lack of housing affordability, the Biden Administration has <a href="https://www.businessinsider.com/biden-housing-plan-federal-funding-cities-build-more-affordable-homes-2022-5">launched</a> an initiative that proposes using federal dollars to boost the affordable housing supply. But there's a catch — the plan will take course over the next five years. That means Americans are unlikely to see a surplus of new inventory introduced to the <keyword id="11893295" type="UNKNOWN" weightage="60" keywordseo="real-estate" source="Orion">real estate</keyword> market next year. With a possible recession looming and mortgage rates trending near a <a href="https://www.axios.com/2022/05/05/mortgage-rates-inflation-home-borrowing">thirteen-year high</a>, the nation's lack of housing inventory will continue to dampen affordability for buyers in 2023.

A recession could throw cold water on the housing market — but that doesn't mean it's going to get any easier to buy a home

<ul class="summary-list"><li>After months of surging prices, Americans seem to have had enough with the housing boom.</li><li>With inventory near record lows and prices climbing at the fastest rate ever, buyers aren't biting.</li><li>There are many signals that buyers are cooling the market on their own by saying no.</li></ul>One question is plaguing prospective homebuyers in <a href="https://www.businessinsider.com/housing-market-prices-inflation-record-april-sp-corelogic-case-shiller-2021-6">this red-hot housing market</a>: When will prices start coming down? But the cure for high prices is high prices, to paraphrase a famous saying from the commodities world.There's evidence that buyers are providing the cure, staying away from the high prices and cooling the market by collective action - or inaction.Here are the three signs that American buyers are slowing the <keyword id="189423" type="PERSON" weightage="60" keywordseo="housing-market">housing market</keyword>'s roll on their own.<h2>1. Sales down from their peak</h2>The start of the pandemic, and <a href="https://www.businessinsider.com/housing-market-boom-federal-reserve-mortgage-bond-purchases-prices-inflation-2021-6">unprecedented easing from the Federal Reserve,</a> sparked the housing boom. Sales of new and previously owned homes still sit well above pre-pandemic levels, but both have slowed from their fall peaks.The <a href="https://www.mba.org/2021-press-releases/july/june-new-home-purchase-mortgage-applications-decreased-238-percent">Mortgage Bankers Association</a> reported that in June, new home sales slowed to an annual rate of 708,000, slumping by 7% from the average rate in 2020.Construction of new houses has stalled out too. The <a href="https://www.census.gov/construction/nrc/pdf/newresconst.pdf">Census Bureau</a> reported Tuesday morning that new housing starts slipped 5% between May and June, suggesting a slowdown in building. Bidding wars may also be slowing down. <a href="https://www.redfin.com/news/data-center/">Redfin has seen</a> a decline in the share of offers facing competition, with 72.1% of offers facing bidding wars in May, compared to just 65% in June.The decline is powered, in part, by the massive shortage of homes across the US. With fewer homes to sell, the sales rate can't remain at elevated levels.Still, the steady decline suggests the market boom could be leveling off. It also comes as median selling prices for new and existing homes sit at record highs, presenting an affordability problem for buyers just entering the market.<h2>2. Buyer optimism waning</h2>The wave of demand that powered the housing boom also seems to be crashing.More than half of surveyed Americans referenced high <keyword id="112918" type="PERSON" weightage="60" keywordseo="home-prices">home prices</keyword> when evaluating the market, according to the University of Michigan's <a href="https://data.sca.isr.umich.edu/">survey of consumer sentiment</a>. The reading marks the biggest share ever recorded by the survey.More broadly, 54% of respondents said it was a bad time to buy homes in May. That's the most pessimistic outlook since 1982.Anecdotal evidence supports the data. Eighty-two percent of millennials said in May they're more likely to buy a fixer-upper due to affordability issues, according to a Bank of America survey. The generation <a href="https://www.businessinsider.com/housing-market-forecast-millennials-buying-homes-crisis-2021-4">is particularly vulnerable to the price melt-up</a>. Millennials are nearing their peak homebuying age and already had their finances dented by the Great Recession. Unless price growth cools, the generation could be forced into cheaper alternatives to homeownership.<h2>3. Mortgage interest sinks</h2>It's not all bad for prospective homebuyers, though. Mortgage rates have only just risen from the record lows seen earlier in the year, offsetting some pressures from soaring prices.Home loan data suggest the trade-off just isn't appealing enough for buyers. The <a href="https://www.mba.org/2021-press-releases/july/june-new-home-purchase-mortgage-applications-decreased-238-percent">Mortgage Bankers Association</a> found that mortgage applications for new homes were down 23.8% in June from the previous year.Forecasts suggest the trend is part of a larger correction. Mortgage applications surged through the second half of 2020, possibly reflecting a pulling forward of demand as borrowing costs tumbled. But loan purchases have fallen below their projected trend through much of 2021, Len Kiefer, deputy chief economist at Freddie Mac, wrote in a tweet.To be sure, housing data is volatile, and recent readings suggest the buying surge will largely continue. Pending home sales soared 8% in May, trouncing the estimate for a 1% decline.The long-term expectation, however, is for a widespread slowdown, said Ian Shepherdson, chief economist at Pantheon Macroeconomics."The surge in pending home sales is a huge outlier," he said. "We still think sales will fall a bit further over the next few months, pushing up the months' supply numbers and taking some of the heat from surge in prices."

3 signs that American homebuyers are solving the housing crisis by refusing to pay crazy prices

<ul class="summary-list"><li><keyword id="11949059" type="UNKNOWN" weightage="60" keywordseo="lumber" source="Orion">Lumber</keyword> prices are spiraling as red-hot house prices and the rising cost of mortgages is hitting affordability.</li><li>Nearly 80% of National <keyword id="11916125" type="UNKNOWN" weightage="60" keywordseo="housing" source="Orion">Housing</keyword> Survey respondents reported now is the worst time to buy a home. </li></ul>Lumber prices have been on a steep decline as a combination of rising interest rates, record-high inflation and a red-hot housing market translate into fewer people being able to afford to buy their own home. Prices are down about 50% year-to-date, recently dropping to their <a href="https://markets.businessinsider.com/news/commodities/lumber-prices-mortgage-housing-demand-plummets-lowest-level-two-decades-2022-6">lowest point in 9 months</a> trading below the $600-per-thousand-board-feet mark. This marks a stark turnaround from 12 months ago, when prices hit a record $1,733, as pent-up demand for construction and home improvement after the pandemic fueled a speculative frenzy.<h2>Why are lumber prices declining? </h2>The weakness in lumber is coming from a jump in the cost of mortgages, where the traditional <a href="https://markets.businessinsider.com/news/commodities/lumber-prices-mortgage-rates-today-housing-market-economy-2022-4?utm_medium=ingest&amp;utm_source=markets">30-year fixed mortgage rose above 5% earlier this year,</a> reaching its highest since 2009. Bearing in mind that the average 30-year rate was below 3% a year ago and house prices were lower, the prospects for anyone looking to buy a home have worsened. On top of that, consumers are dealing with soaring inflation that is racking up the price of everyday goods from food to gas. In the past week alone, mortgage applications fell 7%, slipping 21% year-over-year. At the same time, demand for mortgage refinances dropped 6% over the past week, down 75% year-over-year. Consultancy Pantheon Macroeconomics even went as far as to say mortgage applications were in complete <a href="https://markets.businessinsider.com/news/bonds/us-house-prices-mba-mortgage-applications-falling-meltdown-interest-rates-2022-6">"meltdown."</a><h2>Never been a worse time to buy a home </h2>It doesn't look bright for lumber prices as fewer American consumers are able to afford to purchase a home. <a href="https://www.fanniemae.com/research-and-insights/surveys-indices/national-housing-survey">In a National Housing Survey</a> conducted by the Federal National Mortgage Association, homebuyers expressed they are heavily feeling the pinch with 80% of consumers saying it is a bad time to buy a home in the current environment. This sentiment is backed by a recent research note by Bank of America which posted that <keyword id="11957056" type="UNKNOWN" weightage="60" keywordseo="housing-affordability" source="Orion">housing affordability</keyword> has collapsed near to 1987 and 2005 lows. "Consumers' expectations that their personal financial situations will worsen over the next year reached an all-time high in the May survey, and they expressed greater concern about job security," said Doug Duncan, Fannie Mae Senior Vice President, and Chief Economist."Further, respondents' pessimism regarding homebuying conditions carried forward into May, with the percentage of respondents reporting it's a bad time to buy a home hitting a new survey high. The share reporting that it's 'easy to get a mortgage' also decreased across almost all segments," he added. <h2>The outlook ahead </h2>Homebuyers will likely continue to be squeezed by a surge in mortgage rates, home prices, and inflation as a result, Duncan continued, signaling a grim outlook for lumber prices. Freddie Mac economist Len Kiefer this week said the US housing market is facing its <a href="https://markets.businessinsider.com/news/bonds/housing-market-crash-biggest-contraction-since-2006-freddie-mac-economist-2022-6">worst period of decline</a> since 2006. He stressed the decline will leak into the summer and a rebound is unlikely. An index of average national home prices rose by a record 21.1% year-on-year in March this year. Data for April from the National Association of Realtors shows the average price of a single-family home hit $391,200, the highest since records began in 1968 and double what it was just seven years ago.And now, with the Federal Reserve ending an era of easy monetary policy, lumber prices could be set to deteriorate even further, especially if an environment of higher interest rates destroys construction demand. Robert Dietz, National Association of Homebuilders chief economist, reinforced a pessimistic forecast for lumber when he <a href="https://www.businessinsider.com/mortgage-prices-low-inventory-weaken-housing-affordability-for-millennials-2022-1?IR=C">previously told</a> Insider: "The combination of higher home prices, rising construction costs and moderately higher interest rates will exacerbate housing affordability conditions and <a href="https://eyeonhousing.org/2021/11/home-prices-starting-to-discourage-a-segment-of-home-buyers/">increasingly push</a> prospective buyers out of the market in the coming months."

You Searched For "len kiefer" and got 6 results

Mortgage rates aren't likely to fall again until late 2023 — at the earliest

Alcynna Lloyd

Why mortgage rates are fluctuating so much in 2022

Alcynna Lloyd

The US housing market is seeing its worst contraction since 2006 as mortgage applications crumble, says Freddie Mac economist

Zahra Tayeb

A recession could throw cold water on the housing market — but that doesn't mean it's going to get any easier to buy a home

Alcynna Lloyd

3 signs that American homebuyers are solving the housing crisis by refusing to pay crazy prices

Ben Winck

Lumber prices are tanking as rising interest rates means more Americans are finding it harder to buy a home

Zahra Tayeb

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