From the National Association of Realtors (NAR)
“Mortgage rates dropped further this week, although the 10-year Treasury yield rose in response to higher inflation. Specifically, the 30-year fixed-rate mortgage fell to 2.94% from 2.96% the previous week. With the job market adding fewer jobs than expected in April, mortgage rates continued to stay below 3%. Nevertheless, expect rates to increase in the rest of the year. NAR forecasts the 30-year fixed-rate mortgage to average 3.2% by the end of 2021.
Although mortgage rates may rise in the following months, homebuying activity won’t likely be affected. Keep in mind that rates are hovering at record lows, and they will remain historically low for a longer period. Nevertheless, due to low mortgage rates and favorable demographic trends, current homebuyers are having difficulty in finding a home to purchase, as there are not enough homes for sale, and there are many buyers for the same home. As a result, home prices continue to surge at record highs in many areas across the country.
Take a look here at how many homes a household earning $100K can afford to buy now versus 2 years ago.
