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As Mortgage Rates Rise, Demand Drops
/in National /by Tracy WillisThe S&P 500 bounced back from the 2022 lows. The 10-year U.S. Treasury bonds yield hit 4.337% on Friday. Following a Wall Street Journal report that some Federal Reserve officials are uneasy with the pace of the central bank’s interest rate increases, treasury yields slid down to close out the week. The Mortgage Bankers Association reported that U.S. mortgage demand dropped to a 25-year low, and the average rate for a 30-year fixed-rate mortgage rose to 7.15%. The S&P 500’s price to earnings ration is 15.5 which is below its 10-year average.
Detroit’s Satellite Suburbs Boom With New Home Construction
/in National, SE Michigan /by Tracy WillisOuter-ring suburbs are booming with new residential construction and newly paved roads despite the rising interest rates that are causing the resale home market to slow. According to census data, more than 3,000 new single-family homes were ok’d to be built from January to July of 2022. New construction in satellite suburbs of larger cities is a national trend. Rising interest rates have had an effect on the new-home market. New-home permits are down 10 to 15 percent from last year, but the demand isn’t gone. Lower lumber prices and the continued high demand for housing have helped builders.
Apartment Construction Gets A Boost Due To Mortgage Rates
/in National, SE Michigan /by Tracy WillisNew construction of multifamily properties jumped 28 percent in August. bringing the market’s multifamily segment to its highest level since 1986. The jump is due to rising mortgage rates. Single-family home construction also increased slightly in August after a two-year low. Borrowing costs have doubled since late 2020 due to interest-rate hikes designed to tame high inflation. Last week, the average rate on a 30-year fixed mortgage surpassed 6 percent. The continued low apartment vacancy rates and low single-family inventory have given multifamily construction a boost.