A few months ago, rate cuts, which would help lower mortgage rates, seemed like a sure shot by now as inflation continued to get closer to the Fed’s target month after month.Homebuyers who were waiting for mortgage rates to come down are likely going to have to wait even longer.Spring has undeniably been the best time to put your home on the market.
“Higher rates are curtailing inventory,” Zillow senior economist Nicole Bachaud told CNN. “Some owners who locked in low rates during the pandemic have been reluctant to sell and give up that low monthly payment, especially in the most expensive markets where mortgage costs are more sensitive to changing rates.”
Housing affordability, by and large, is a product of the number of homes on the market. And homeowners who secured low-rate mortgages when the Fed kept rates at ultra-low levels during the pandemic have little incentive to move and risk paying much higher rates. Also, in certain parts of the country like Texas and Florida, new home construction is providing sizeable price relief, Bachaud said. That’s attracting more homebuyers to those markets. In some cases, homebuilders have even offered buyers perks like mortgage buy-downs to incentivize people to move into neighborhoods that may be in less developed areas compared to where existing homes are located.