### Summary
House price inflation in Britain slowed in June, with the exception of London, as high mortgage rates deter buyers. Meanwhile, in the US, policymakers are divided over the need for more interest rate hikes, and China's central bank cut a key interest rate due to economic risks.
### Facts
- 💰 Average UK house prices increased by 1.7% in June, down from 1.8% in May, with London being the only region where property prices fell by 0.6%.
- 💸 Policymakers in the US are divided over the need for more interest rate hikes, with "some participants" concerned about the risks of raising rates too far, while "most" officials prioritize battling inflation.
- 🇨🇳 China's central bank unexpectedly cut a key interest rate, the one-year medium-term lending facility (MLF), by 15 basis points to 2.5%, and also lowered the seven-day reverse repo rate to 1.8%.
- 📉 The rate cuts in China were implemented due to a deteriorating property market, weak consumer spending, and sluggish economic data, including trade and consumer price numbers as well as record-low credit growth.
Mortgage rates topping 7% have led to a significant drop in mortgage applications for home purchases, with last week seeing the smallest volume in 28 years. The increase in rates, driven by concerns of high inflation, has priced out many potential buyers and contributed to low housing supply and high home prices. As a result, sales of previously owned homes have declined, and homeowners are reluctant to sell their properties due to the higher rates. Some buyers are turning to adjustable-rate mortgages to manage the increased costs.
US mortgage applications for home purchases fell to their lowest level in 28 years, while refinancing also declined, as mortgage rates reached a 23-year high, according to data from the Mortgage Bankers Association.
The average rate on a 30-year fixed mortgage has risen to the highest level since 2001, making housing affordability even more difficult for buyers.
Mortgage rates in the US are at a 22-year high, impacting the already tight housing market due to high prices, and economists predict that rates will remain elevated for a few more months before starting to come down, but are expected to settle well above the rates seen during the early stages of the pandemic.
The average rate on 30-year fixed-rate mortgages decreased to its lowest point in three weeks, with most loan types experiencing a double-digit decline.
British house prices in August 2023 experienced their biggest annual decline since July 2009, falling by 5.3% due to higher interest rates reducing buyer demand, according to mortgage lender Nationwide.
Average 30-year mortgage rates are still elevated at 6.94% in August, but they are expected to come down by the end of the year; however, a significant drop that will boost homebuying demand is not likely until 2024 or 2025, but there are advantages to buying a home even when rates are high, such as less competition.
Demand for mortgages in the US has hit a 28-year low, with purchase applications falling to the lowest level since December 1996, despite a decrease in mortgage rates.
Mortgage applications hit their lowest level since December 1996, despite a decrease in mortgage rates, as prospective buyers are deterred by low housing inventory and high mortgage rates.
The value of UK mortgage arrears has increased by almost a third in April-June compared to the same period last year, reaching its highest level since 2016, due to rising mortgage costs caused by multiple interest rate hikes by the Bank of England. While some experts predict a rise in defaults, others argue that the number of people unable to repay their mortgages remains relatively low.
The average 30-year fixed mortgage rate has jumped to 7.19%, the second-highest rate since November, signaling a decline in U.S. housing affordability; experts predict varying future rates, with some expecting a decline and others projecting rates to remain relatively high.
More than a third of homes for sale in the UK have experienced price cuts, the highest proportion in over a decade, suggesting that some sellers were initially too optimistic about their asking prices, according to property website Rightmove. The average size of the reduction is also the largest since January 2011 at 6.2%, with the typical cut amounting to £22,709. The housing market has been affected by a slump following consecutive interest rate rises, although there are signs of activity starting to pick up.
Mortgage rates are currently high but may level off soon, with experts predicting a potential decrease in early 2024 and rates around 5% in Q4, according to industry professionals.
Many homeowners in the UK are struggling to meet their mortgage repayments due to the Bank of England's 14 interest rate hikes since December 2021, with further increases predicted, leading to fears for the future and reliance on food banks.
UK lenders are expected to reduce mortgage rates following the Bank of England's decision to keep interest rates unchanged, potentially leading to a mortgage price war among banks and building societies. However, consumer champion Martin Lewis warns that attractive fixed-rate savings accounts may soon have lower rates.
Mortgage rates reaching their highest level in almost 23 years are causing a decline in demand for new loan applications.
The average rate on a five-year fixed mortgage in the UK has dropped below 6% for the first time since July, providing some hope for borrowers, although rates are still higher than they were a few months ago, and experts do not expect rates to reach the ultra-low levels seen in the past.
Rising mortgage rates have led to a significant decline in pending home sales in August, as potential buyers are deterred by the increased cost of borrowing.
The average long-term U.S. mortgage rate reaches its highest level in nearly 23 years, making the housing market even more unaffordable for prospective homebuyers.
UK house prices are dropping at the fastest rate since 2009, driven by higher mortgage rates and affordability constraints, but buyer demand and consumer confidence are showing signs of improvement. Lowering mortgage rates could be key to revitalizing the housing market, which is expected to end the year with prices 2-3% lower than at the beginning of the year.
30-year mortgage rates experienced their largest one-day drop since early March, falling almost three-tenths of a point to a record low, following a surge to a 23-year high the day before, prompting potential homebuyers to shop around for the best mortgage option.
Mortgage applications hit their lowest levels in nearly 30 years due to an increase in borrowing costs, forcing potential buyers out of the market and leading to a rise in adjustable-rate mortgages as borrowers search for ways to lower their payments.
U.S. mortgage interest rates rose to their highest level since November 2000, resulting in the lowest home loan application volumes in 27 years.
Higher mortgage rates are adding strain to prospective homebuyers as elevated home prices and a lack of inventory make it difficult to find affordable housing, with the 30-year fixed-rate mortgage now at its highest level since December 2000.
Mortgage rates are expected to fall in the coming months, offering homebuyers more affordability and potentially boosting the housing market.
High mortgage rates are expected to fall over the next year, with rates projected to decrease to 6.1% by the end of 2024 and the 30-year mortgage rate falling to 5.5% by the end of 2025, driven by a slowing U.S. economy and signs of a weakening economy, according to the Mortgage Bankers Association.
Mortgage rates dropped at the end of the week, with the 30-year fixed-rate average at 8.07%, significantly lower than the previous week's historic high of 8.34%.
Average 30-year mortgage rates are expected to trend down in the next few months, but more substantial drops are not likely until next year, making the end of 2024 a better time for potential homebuyers to start the process, while current homeowners may have an opportunity to refinance in the next year or two.
US 30-year fixed mortgage rates have reached their highest level since 2000, now averaging 8%, due to the Federal Reserve's aggressive interest rate hikes and the broader shifts in the macroeconomic environment, creating financial stress and impacting the affordability of homes for prospective buyers.
US mortgage applications hit a nearly 30-year low as borrowing costs continue to rise, suggesting further decline in the housing market.
Mortgage rates have reached their highest level in 23 years, making it increasingly difficult for buyers to afford homes and forcing many to back out of the market, while also contributing to low inventory levels.
Mortgage rates nearing 8% and a shortage of homes for sale are preventing potential homebuyers, particularly first-time buyers, from entering the market, leading to a 2% decrease in existing-home sales in September compared to the previous year.
Rates on 30-year mortgages dropped significantly, reaching their lowest level in eight days, while rates for other loan types also saw decreases, prompting consumers to shop around for the best mortgage option.
Mortgage rates have reached their highest levels in over 20 years, approaching 8%, causing a slowdown in purchase demand and leading economists to project the slowest year for home sales since 2008.
