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There's some welcome news for people shopping for a home, as the rise in prices could finally be starting to cool.
"Realtor.com’s weekly data show that the number of newly-listed homes for sale continues to grow, leading to a noticeable moderation in the pace of price gains, which have risen less than 10% year-over-year for the past two weeks, the first time we’ve seen this in the last year.," according to Realtor.com Senior Economist George Ratiu.
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The Freddie Mac fixed rate for a 30-year loan inched up this week.
According to Ratiu, mortgage rates responded to the rise in the 10-year Treasury, fueled by investors anticipating another rise in consumer prices and a higher rate of inflation.
"Yesterday’s release showed that price growth in July was significant, but not as high as June, especially when considering core inflation," said Ratiu. "In short, rates are expected to bounce around below the 3% mark until the Fed clarifies a timeline for the expected tapering of monthly mortgage-backed securities purchases."
MORTGAGE APPLICATIONS RISE AS FIRST-TIME HOMEBUYERS FIND OPTIONS
The Labor Department said consumer prices rose 0.5% from June to July, down from the previous monthly increase of 0.9%. Year over year, consumer prices have increased a substantial 5.4%.
Spring has traditionally been the busiest time of the year for home buyers, but low rates may fuel strong buying interest into the late summer, which usually sees a slowdown, according to Realtor.com.
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"The combination of rising inventory, slowing price gains, and low interest rates offer a much-needed ray of sunshine to many buyers who have been growing increasingly exhausted by an extremely competitive housing landscape," said Ratiu. "These factors also signal that fall may turn out to be a busier season than usual, as buyers seek to take advantage of improving market conditions."
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