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Mortgage rates drop for the second week in a row - YouTube
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mortgage rates dropped for the second
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week in a row but that didn't revive
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demand for potential homeowners no
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indeed and although rates have calmed in
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recent days they are still significantly
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higher now than they were a year ago the
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influx in the market has caused many to
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re-evaluate their budgets or drop out of
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the market completely the average
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interest rate for a 30-year fixed-rate
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mortgage decreased a fraction of a
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percentage point to 5.74
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so what does that mean in money this
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time last year the average 30-year
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mortgage rate was at 2.98
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in 2021 a 250 000 loan would have cost
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home buyers a monthly payment of a
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little more than a thousand dollars with
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the current weekly average that same
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monthly payment jumps to more than
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fourteen hundred dollars joining us now
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to talk more about this is danielle hale
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danielle is the chief economist for the
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real estate listings website realtor.com
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danielle welcome it's great to have
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somebody uh who knows about real estate
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to sort of break this down for us
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because what does this fluctuation in
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rates mean
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for the market and for potential home
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buyers you know they're trying to
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navigate all of this what should they
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think
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so potential home buyers have had to
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face much higher mortgage rates
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throughout most of 2022 and even though
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we saw rates pull back a little bit this
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week and and the last week
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they're still much higher than they were
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at this time one year ago and it's not
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just higher mortgage rates but buyers
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today are also facing higher home prices
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so if you combine those two factors it's
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not just a four hundred dollar monthly
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payment increase but probably for like a
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seven to eight hundred dollar monthly
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payment increase to buy the typical home
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today so the market is getting much more
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challenging for home shoppers that's why
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we're seeing some of them just put their
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plans on hold so they can get into a
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situation where they're more financially
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prepared to navigate today's market so
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danielle i mean are there any
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indications that the market will ever
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return to the 2021 rates of 2.98
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i wouldn't count on it anytime soon
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especially if you're a home shopper we
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know the fed is normalizing short-term
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rates by pushing them up to fight
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inflation that has really gotten
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way above the typical two percent target
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range so they've got some really
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aggressive action to do they've been
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taking aggressive action that's one of
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the reasons why we've seen mortgage
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rates move up so quickly if you think
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back i know it seems like a long time
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ago but just at the end of december
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rates were right around three percent
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and now they're up well above five
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percent that's a big shift in a very
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short period of time it's going to take
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shoppers some time to adjust to these
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rates and what what that means for their
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budget so my advice for shoppers in the
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market is to prepare for some rate
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volatility we've seen that rates can
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climb they can in fact drop from week to
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week but when you're thinking about your
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home price
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target when you're shopping you want to
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consider a range of interest rates so
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you know how these changes are going to
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impact your bottom line um it's i'd like
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to call it rate proofing your budget so
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considering those higher mortgage rates
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and knowing how that affects the home
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price that you're targeting when you're
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searching for a home today and so for
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buyers who are still on the sidelines
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and are feeling like ugh we miss the
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boat on the low mortgage rates right
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when would you advise them uh on the
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best time to buy
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so with
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the number of homes available available
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for sale starting to increase but still
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quite low i like to tell shoppers it's
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the right time to buy when you find a
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home that fits your must-haves and falls
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within your budget if you can make the
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numbers work go for it put an offer in
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rates as we know have dropped recently
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they could start climbing again and you
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don't want to feel like you missed out
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on an opportunity because you were
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waiting for something else down the
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future so if the numbers work go for it
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that said we usually see
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um that given the seasonality in the
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housing market the fall can be a really
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good time for buyers they're still
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sellers participating in the market who
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want to sell homes before the end of the
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year at the same time a lot of buyers
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have either found a place to go to or
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have decided to rent and so they're not
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as active in the housing market and that
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can really shift the market balance so
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it's a little bit more favorable for
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buyers if they're looking in the fall
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all right i like the idea of rate
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proofing your budget yeah very sound
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advice danielle hale danielle thank you
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absolutely
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