Jeff Sica from Circle Squared Alternative Investments has raised concerns about the Fed’s recent decision to cut rates, suggesting it won’t solve the housing affordability issue. He emphasizes that gold remains the best protection against inflation and uncertainty.
According to Freddie Mac, mortgage rates have dropped for the first time in three weeks, now averaging 6.3% for a 30-year fixed mortgage. This number is slightly down from 6.34% last week, but still higher than the 6.32% rate of a year ago.
Sam Khater, Freddie Mac’s chief economist, mentioned that these lower rates seem to be bringing some homebuyers back into the market, as activity picks up. However, many Americans still hesitate due to concerns about the ongoing government shutdown and the broader economic landscape.
The average rate for a 15-year fixed mortgage also saw a slight decrease, now sitting at 5.53%, down from last week’s 5.55%. A year earlier, this rate was a bit better at 5.41%.
Federal shutdowns cast a shadow on the economy, impacting consumer confidence. Daryl Fairweather, the chief economist at Redfin, noted that many people feel overwhelmed by issues like inflation and job losses, making them apprehensive about major purchases like homes or cars.
A report from Redfin showed a 1.3% decline in pending home sales compared to last year, marking the sharpest drop in five months. Redfin’s findings suggest that many potential buyers are waiting for mortgage rates to drop further before making any commitments.
The typical home now takes longer to sell, averaging 48 days to go under contract, which is a week longer than last year and the longest wait since 2019. Overall, uncertainties surrounding the economy and government actions continue to keep many potential homeowners on the sidelines.
