LOUISVILLE, Ky. — Many financial experts predicted interest rates would be slashed at least once or twice in 2024, but so far, that hasn't happened.
Mortgage rates are actually increasing in the United States and eclipsed 7% this week for the first time since November. A 30-year fixed rate mortgage averaged 7.10% this week, an increase from 6.88% last week, according to data released by Freddie Mac.
The 30-year fixed rate a year ago was 6.39%.
According to US Bank, the 30-year fixed mortgage rate in Kentucky and Indiana Friday was 7.125%. That means the average monthly payment on a $232,000 home with a 25% down payment would be about $1,563.
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Rising rates coupled with low inventory make it harder for perspective home-buyers to find something they can afford. So when will rates finally start to drop?
Kinloch Partners Co-Founder and CEO Bruce McNeilage doesn't think it will happen anytime soon.
"I'm calling 8%," he told Yahoo Finance. "There is not enough supply out there. Supply and demand is working. The value and price of homes is just simply not going down. If anybody is waiting to get a house and can get a mortgage right now I would suggest they do so. If you can't do it and can't afford a house, there's opportunities to rent brand-new ones out there for folks."
Many experts and economists expected the Federal Reserve to begin slashing interest rates this year after years of raising or freezing them post-pandemic. The Fed doesn't directly set interest rates, but its actions have a big influence on rates.
Disappointing inflation reports have kept them from issuing any rate cuts so far in 2024.
“As rates trend higher, potential homebuyers are deciding whether to buy before rates rise even more or hold off in hopes of decreases later in the year,” Freddie Mac chief economist Sam Khater said in a statement to CNN.
The National Association of Realtors issued a report recently saying U.S. home sales decreased significantly in March. It's a sign many home-buyers are waiting in the hopes rates drop.
According to reports from the Greater Louisville Association of Realtors, new listings in Jefferson County increased from 754 in February of last year to 833 in February of this year. However pending sales dropped from 677 to 575, a 15% decrease. Closed sales were up 6.9%.
For the year, new listings are up 2.5% and pending sales are down 12.3%. The average sale price for a single family home is up about $10,000 in 2024 compared to 2023.
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