March 1st, 2021 11:24 AM by Jackie A. Graves
Warning bells about a slowdown in the white-hot housing market are ringing louder thanks to an uptick in mortgage rates and new weakness in pending home sales.
Why it matters: Mortgage rates plummeted in 2020 as the economy buckled under the pressure of the coronavirus pandemic. Now that trend is reversing, putting a damper on consumer appetite for homebuying.
What's happening: The rate on a 30-year fixed mortgage rose to 2.97%, which is its highest level since August 2020, according to Freddie Mac's weekly survey released Thursday.
What they're saying: "The housing sector is always sensitive to changes in mortgage rates so the latest data is showing a loss in momentum for overall housing,” Lawrence Yun, NAR's chief economist, tells Axios.
Yes, but: Investors are also factoring in Fed chair Jerome Powell's comments this week emphasizing that the Fed is unlikely to tighten monetary policy solely in response to a stronger labor market, Danielle Hale, realtor.com chief economist, noted in a statement.
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