Jeff Sica from Circle Squared Alternative Investments recently pointed out that even a small rate cut from the Federal Reserve is unlikely to fix the ongoing housing affordability crisis. He also emphasized that gold continues to be a reliable safeguard against inflation and global uncertainty.
This week, mortgage rates saw a rise according to Freddie Mac’s latest report. The average rate for a 30-year fixed mortgage climbed to 6.34%, up from 6.3% last week, and is higher than the 6.12% rate recorded a year ago.
Sam Khater, chief economist at Freddie Mac, stated that while the average rate for a 30-year fixed mortgage has increased, it’s still lower than the 52-week average of 6.71%. The recent months have seen some lower rates, which along with a reported boost in pending home sales suggests that homebuyers are feeling more assured about entering the market.
Mortgage rates are closely tied to 10-year Treasury yields, and they are predicted to remain stable as markets react to the ongoing government shutdown. Realtor.com’s senior economist, Jiayi Xu, noted that the timing of this shutdown is quite critical—especially following the Fed’s first policy rate cut in nine months.
As mortgage rates start to influence buying power, it remains to be seen how the uncertainties will affect potential buyers, particularly in areas with a high concentration of federal employees. The longer the shutdown continues, the more it could weigh on market conditions and monetary policy choices.
In summary, while lower mortgage rates have reignited some interest among homebuyers, ongoing economic uncertainties may lead many to think twice before making significant financial commitments.
