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Business Times
5 days ago
- Business
- Business Times
Mortgage rates in US inch down, sending 30-year loans to 6.74%
[WASHINGTON] Mortgage rates in the US fell for the first time in three weeks. The average for 30-year, fixed loans was 6.74 per cent, down from 6.75 per cent last week, Freddie Mac said in a statement. High home prices and mortgage rates hovering stubbornly close to 7 per cent are discouraging buyers from forging ahead on deals, even as the recent bump in listings has increased their negotiating power. Purchases of resale homes dropped in June to the slowest pace in nine months, the National Association of Realtors reported this week. The Federal Reserve is largely expected to hold interest rates steady at its meeting next week. Policymakers face 'a lot of political pressure' to cut, said Jiayi Xu, an economist at 'However, the persistent risk of tariff-driven inflation, combined with a rising US fiscal debt – expected to grow further following the passage of the Big Beautiful Bill – has helped establish a relatively high floor for interest rates, at least for now.' BLOOMBERG
Fast Company
5 days ago
- Business
- Fast Company
Average long-term U.S. mortgage rate eases to 6.74%
The average rate on a 30-year U.S. mortgage eased this week, offering little relief for prospective homebuyers facing record-high home prices. The long-term rate slipped to 6.74% from 6.75% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.78%. Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also eased. The average rate dropped to 5.87% from 5.92% last week. A year ago, it was 6.07%, Freddie Mac said. Elevated mortgage rates have been weighing on the U.S. housing market, which has been in a sales slump going back to 2022, when rates started to climb from the rock-bottom lows they reached during the pandemic. Sales of previously occupied U.S. homes, which sank to their lowest level in nearly 30 years in 2024, have remained sluggish this year and slid last month to the slowest pace since last September. Sales of new single-family homes edged up 0.6% last month, but the sales pace for June and May have been the slowest since last October. While there are more homes on the market than a year ago, rising home prices and stubbornly high mortgage rates have made homeownership financially untenable for many Americans. Elevated mortgage rates are also discouraging many homeowners from selling because they locked in mortgage rates when they were much lower. 'The persistent risk of tariff-driven inflation, combined with a rising U.S. fiscal debt — expected to grow further following the passage of the Big Beautiful Bill Act — has helped establish a relatively high floor for interest rates, at least for now,' said Jiayi Xu, an economist at Mortgage rates are influenced by several factors, from the Federal Reserve's interest rate policy decisions to bond market investors' expectations for the economy and inflation. The main barometer is the 10-year Treasury yield, which lenders use as a guide to pricing home loans. The yield was at 4.41% at midday Thursday, down from 4.40% late Wednesday, following the latest signals that the U.S. economy seems to be holding up OK despite all the pressures on it from tariffs and elsewhere. Yields have moved higher for most of this month as traders bet that the Fed will hold its key short-term interest rate steady at its upcoming meeting next week, despite President Donald Trump demanding that the Fed to lower rates. A less independent Fed could mean lower short-term rates, which influence the interest consumers pay on credit cards and auto loans, but it could have the opposite effect on the longer-term bond yields that influence the rates on home loans. The average rate on a 30-year mortgage has remained relatively close to its high so far this year of just above 7%, set in mid-January. The 30-year rate's low point this year was in early April when it briefly dipped to 6.62%. Economists generally expect the average rate on a 30-year mortgage to remain above 6% this year. Recent forecasts by and Fannie Mae project the average rate easing to around 6.4% by the end of this year.
Newsweek
20-07-2025
- Business
- Newsweek
The Only US City Where a Starter Home Costs Less Than Renting
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Pittsburgh is the only major U.S. metropolitan area where a starter home still costs less than renting, according to a new study by after years of price increases have caused homeownership to become unaffordable to many Americans. In June, buying a starter home in the Steel City was $111 cheaper than renting, considering an estimated $1,472 for renting a 0-to 2-bedroom home, which would cost about $1,361 to buy, 7.5 percent less. In any other major U.S. metro area, renting is currently much cheaper than buying a starter home—even as this advantage is starting to shrink. Why Is Renting So Much Cheaper Than Buying? June marked the 23rd straight month of year-over-year median rent decline for 0-2 bedroom homes across the country's 50 largest metros, according to while asking rent stood at $1,711, $6 more than the previous month. This is obviously good news for renters, but if we look at the historical data, it is actually not as great as it looks. The U.S. median rent is actually just $48 cheaper (-2.7 percent) now than in the peak seen in August 2022. The advantage of renting is greater when compared to the cost of buying a home, which has yet to come down significantly from its pandemic heights. "During the pandemic era, housing prices surged significantly. In addition, today's elevated mortgage rates and increasing insurance premiums have made owning a home become more expensive," economist Jiayi Xu told Newsweek. "On the rental side, there is a boom of new multifamily construction," Xu said. "With a steady stream of new rental supply entering the market over time, rents have remained stable—or even declined—due to abundant inventory, making renting a far more affordable option." Photo-illustration by Newsweek/Getty calculated that the cost of buying a starter home in the U.S.'s 50 largest metros in June was $908 (53.1 percent) higher than renting one. To determine this number, they considered the median list price of a 0-2 bedroom home, a 9 percent down payment, homeowners association (HOA) fees, taxes, and homeowner insurance for buyers; the cost of renting was based on the median rent in each metro. While the scale is definitely tilted toward renting—especially as mortgage rates still hover around the 7 percent mark, prices are still increasing in many parts of the country, and other housing costs are rising, the advantage of renting is shrinking already in some metros. "The advantage of buying has diminished over the past 12 months, as lower home prices initially attracted a wave of buyers—driving up competition and pushing prices higher," Xu said. What Makes Pittsburgh the Exception? Pittsburgh tends to have home prices well below the national average—for a number of reasons. One is that Pittsburgh somehow managed to be a so-called "unicorn city" during the pandemic homebuying frenzy, when so many markets across the country quickly became overheated and prices jumped through the roof. "It avoided the housing boom cycle during the pandemic and was able to maintain its stability," Xu said. "In fact, according to a recent report, it is one of just three major U.S. metros where a typical household can afford a home while spending less than 30 percent of its annual income," she said. That makes Pittsburgh one of the few major U.S. metros where homebuyers are not cost-burdened. "The Pittsburgh market has continued to be a steady real estate market throughout history. Throughout the pandemic, Pittsburgh was incredibly resilient. We have a lot of reasons why this was the case," David Dean, president of the Pennsylvania Association of Realtors and a Pittsburgh native, told Newsweek. "We have a tremendous infrastructure with the medical industry in the city. The real estate industry was able to pivot toward supporting a steady market than other places were. We embraced technology quickly to be able to show properties and complete the transaction without ever being face to face," he said. A car with headlights on crosses the Roberto Clemente Bridge from downtown Pittsburgh as the sunrise light begins to illuminate the bridge in April 2024. A car with headlights on crosses the Roberto Clemente Bridge from downtown Pittsburgh as the sunrise light begins to illuminate the bridge in April 2024. Getty Images Another reason for the city's lower prices is Pittsburgh's aging housing stock. "According to 2023 ACS data, the median year homes were built nationwide is in 1981, compared to 1961 in Pittsburgh—indicating that much of the housing inventory in the metro is significantly older and often in need of renovation, which helps keep prices down," Xu said. "Though many homes are dated, they offer an opportunity for buyers to invest in renovations and achieve homeownership at a more accessible price point." According to Dean, there is a very large inventory of affordable homes in the Pittsburgh market. "People who want to age in place can, but those who want to right size, are able to put their homes on the market for other buyers," he said. "Pittsburgh has become a destination for those who want to take advantage of living in a metro area because they find they can afford a much larger property for their investment," he added. "We're seeing prices increase across the economy and homeowners are enjoying the return on their investment in a home." Home prices have been inching up in Pittsburgh in recent months, with the median sale price of a home in the city, according to Redfin, up 1.9 percent year-over-year in June, at $270,000. But experts believe that this increase is temporary, and won't chip away at the city's housing affordability. "On average, we have seen some price increases this past year but I believe it is mostly relative to the inventory," Michelle Senko, president of the Realtors Association of Metropolitan Pittsburgh, told Newsweek. "I strongly believe Pittsburgh will remain affordable because of the complementary factors surrounding the property values; a variety of dynamic communities, modest cost of living and industrial growth remaining stable."
New York Post
16-07-2025
- Business
- New York Post
This High-Priced Metro's Popularity Surges Among Local Homebuyers: Why They're Staying Put as Others Flee Big Cities
Following a period of urban flight driven by a crisis of homelessness and quality-of-life decline, San Francisco appears to be turning a corner, with fewer residents now looking to leave. San Francisco has gained popularity among the locals, as only 62.9% listing views went to homes in outside markets in spring 2025, down from 68.9% six years ago, according to a new report from Advertisement Economist Jiayi Xu studied the 100 largest U.S. metros for cross-market demand, focusing on views of listings and comparing how many users from out-of-town were looking at homes in a city versus how many locals were browsing properties elsewhere. 4 San Francisco has gained popularity among the locals, as only 62.9% listing views went to homes in outside markets in spring 2025. dell – She found that in all four regions, more than half of online shopping traffic went to homes outside of the shopper's current metro areas. But that trend was slightly different in San Francisco, which has managed to win over the locals despite the city's stubbornly high cost of living, skyrocketing home prices, and elevated unemployment rates. Advertisement In June, the median list price in the sprawling West Coast metro reached $998,500, up 4% from the same period six years ago—handily the highest among the seven cities that have seen a rise in interest from local homebuyers since the pre-pandemic era. During that period, the unemployment rate in San Francisco has increased from 2.3% in May 2019 to 3.9% in May 2025. Affordable by comparison 4 In June, the median list price in the sprawling West Coast metro reached $998,500, up 4% from the same period six years ago. SeanPavonePhoto – And still, more San Franciscans are staying put and looking to buy homes locally. Advertisement One of the major factors behind this surprising trend, according to Xu, is that some of the neighboring metros are even less affordable than San Francisco. The nearby city of San Jose, located in the heart of Silicon Valley—the home of tech giants like Apple and Google—has earned the dubious distinction of having the highest median list price of the 50 largest U.S. metros, coming in at a staggering $1,398,000 in June. A month earlier, San Jose's median home price was even higher, reaching $1,419,000, requiring the typical earner to spend more than 72% of their income, assuming a 20% down payment and a 30-year fixed mortgage rate of 6.82%, according to research. For comparison, a person earning a median income in San Francisco would have to set aside less than 60% of their salary to cover housing expenses. Advertisement 'While the San Francisco metro remains expensive, prices have cooled from their [COVID-19] pandemic-era highs, making entry somewhat more feasible for some buyers,' explains Xu. 'In particular, areas like the Tri-Valley region offer more attainable options—especially compared to the pricier San Jose metro—with a broader range of relatively affordable inventory and greater housing variety.' Downtown San Francisco's gradual comeback 4 For comparison, a person earning a median income in San Francisco would have to set aside less than 60% of their salary to cover housing expenses. fukez84 – Another likely reason for the growing appeal of San Francisco's housing market is the city's urban improvement plan, marked by lower crime rates and cleaner streets. Mayor Daniel Lurie, who came into office in January, has pledged to tackle crime, open-air drug use, and the proliferation of homeless encampments, all of which sharply decreased foot traffic and sent businesses fleeing the bleak downtown area a few years ago. The effort by the Democrat—and heir to the Levi Strauss fortune—to clean up and revitalize the downtown area has shown early signs of progress, including a sizable drop in crime and the number of street encampments. His early initiatives have included enforcement sweeps at known drug hot spots and a mandate that city-provided drug paraphernalia be handed out only alongside referrals to counseling and recovery services. Downtown San Francisco's housing market has visibly perked up in response to Lurie's efforts, with the median list price in May surging more than 50% year over year. 4 Another likely reason for the growing appeal of San Francisco's housing market is the city's urban improvement plan, marked by lower crime rates and cleaner streets. fannyes – Advertisement The AI boom is also being credited with more tech workers either moving to or staying put in the city, and tech leaders say that the artificial intelligence gold rush, with hundreds of billions of dollars on the line, will play a major role in continuing to woo workers back to San Francisco. 'It's because of AI that San Francisco is back,' said Nvidia CEO Jensen Huang last month at The Hill & Valley Forum. 'Anybody who lives in San Francisco, you'll know what I'm talking about. Just about everybody evacuated San Francisco,' he said. 'Now it's thriving again. It's all because of AI.' Six other metros saw a drop in out-of-market home shopping in spring 2025 compared with six years earlier›. Advertisement Portland, OR, topped the list, with just 57.9% of listing views going to homes in other areas, down nearly 10% from 2019. San Francisco was in second place, with a six-year share change of 5.9%, followed by Houston, TX, boasting a 4% change in out-of-market online home shopping. 'These markets generally share traits like relative affordability, diverse job opportunities, stable employment, and easy access to nature and outdoor amenities,' notes Xu.
New York Post
15-07-2025
- Business
- New York Post
Once-booming Texas border city known for affordability loses appeal among homebuyers
Long recognized for its affordable housing and low cost of living, McAllen, TX, emerged as a COVID-19 pandemic-era boomtown—but that surge has since reversed. McAllen—a city of 146,000 people situated just a few miles north of the U.S.-Mexico border—experienced the sharpest decline in popularity among local homebuyers over the past six years, according to a new report from Advertisement The report analyzed the 100 largest U.S. metros for cross-market demand. Economists looked at views of listings, comparing how many out-of-town visitors were looking at homes in a city versus how many locals were shopping for properties elsewhere between April and June 2025. According to the latest data, during the spring season, 65% of online home shopping traffic in McAllen went to listings outside the city, representing a 30% increase from 2019—the biggest jump among all the analyzed metros. economist Jiayi Xu explains that McAllen's drop in homebuyer interest could be attributed to a combination of factors. Advertisement 3 McAllen—a city of 146,000 people situated just a few miles north of the U.S.-Mexico border—experienced the sharpest decline in popularity among local homebuyers over the past six years. Courtesy of City of McAllen 'Like many affordable markets, McAllen, TX, attracted new residents during the pandemic due to its low cost of living,' says Xu. 'However, as home prices rose and return-to-office trends resumed, some of that migration has started to reverse.' Lower affordability, higher unemployment In June 2025, the median home list price in McAllen was $274,950, up more than 38% from the same period in 2019. Meanwhile, the unemployment rate in the border city reached 6% in May of this year, compared with 5.4% six years ago. Advertisement In light of rising home prices and shrinking job opportunities in McAllen, local homebuyers began casting covetous glances toward more busting nearby metros like Austin and San Antonio, where there is an abundance of high-paying work. 3 According to the latest data, during the spring season, 65% of online home shopping traffic in McAllen went to listings outside the city. According to the analysis, McAllen residents' out-of-market online home searches directed at Austin and San Antonio surged from just 4.8% and 16.1%, respectively, to 10.7% and 18.9% over the past six years. Ironically, McAllen might be a victim of its own success, as rising home equity has likely enabled residents to relocate to higher-priced metros. Advertisement 'Over the last six years, home prices in McAllen have climbed 65.6% on a price-per-square-foot basis, significantly increasing homeowner equity,' says senior economic research analyst Hannah Jones. 'This equity growth may be providing some local homeowners with the flexibility to pursue employment opportunities in other parts of Texas.' 3 Meanwhile, the unemployment rate in the border city reached 6% in May of this year, compared with 5.4% six years ago. Google Maps But according to Jones, it's not all bad news for McAllen, located just across the Rio Grande from Mexico—an area that has been at the center of the ongoing border crisis. 'While the 'border crisis' narrative could nudge some buyers or employers away from McAllen, there is no evidence of a mass exodus of population,' she says. 'The area's housing market remains stable, and its relative affordability means that the area sees strong demand from out-of-metro buyers.'
