U.S. Mortgage Rates Climb Again
Freddie Mac reports the 30-year fixed mortgage rate averaged 6.77% for the week ending Feb. 15 — up from 6.64% last week. A year ago, mortgage rates averaged 6.32%.
Mortgage rates factor into home sales and the refinance market and higher rates are impacting housing-related activity.
“On the heels of consumer prices rising more than expected, mortgage rates increased this week,” said Sam Khater, Freddie Mac’s chief economist. “The economy has been performing well so far this year and rates may stay higher for longer, potentially slowing the spring homebuying season. According to our data, mortgage applications to buy a home so far in 2024 are down in more than half of all states compared to a year earlier.”
Home prices continue to climb in South Florida at a time when they should be flatlining or declining, and that’s a reason for concern, an economist from Florida Atlantic University previously told the Business Journal.
The trend suggests South Florida home prices might be in for a painful correction as home values become too inflated, said Ken H. Johnson, a real estate economist for Florida Atlantic University’s College of Business.
In terms of mortgages, South Florida had the sixth highest percentage of equity-rich homes of any metro region in the nation, a recent report stated.
According to a recent report from Attom, an Irvine, California-based curator of real estate data, 61.8% of the homes in the Miami-Fort Lauderdale-West Palm Beach area that still had outstanding mortgages were equity-rich as of the fourth quarter of 2023.
In contrast, just 46.1% of mortgaged residential properties across the U.S. were equity rich as of Q4 2023.
An equity-rich home means the amount of money a homeowner owes on a mortgage is less than half of that home’s estimated value.
In addition, the portion of equity-rich homes throughout South Florida went up slightly from the previous third quarter when just 61% of its homes were equity-rich, Attom figures stated.
But nationally, the percentage of equity-rich homes fell by 1.3% from 47.4% in the third quarter of 2023. At the same time, the percentage of seriously underwater homes (those were loan balances are at least 25% higher than a home’s estimated market value) went from 2.5% in the third quarter to 2.6% in the fourth quarter across the U.S.
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