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After hitting a 16-month low of 6.11% in early September, the average 30-year fixed-mortgage rate tracked by Mortgage News Daily has ticked back up, reaching 6.62% on Tuesday.
That increase will likely dampen some of the refinancing activity, which had started to gain a bit of momentum as some borrowers with 7% and 8% mortgage rates took the opportunity to get some relief.
According to a new survey by John Burns Research and Consulting (JBREC), neither the 6.11% rate nor today’s 6.62% was going to do too much to motivate homeowners who would like to sell but are staying put because of mortgage rates.
At what mortgage rate level would resale turnover—currently hovering at multi-decade lows—really pick up?
The “magic mortgage rate” that JBREC says would truly unlock the housing market is below 5.5%. The research firm has held this view for a while and reaffirmed it last week, citing its September 2024 survey.
Only 13% of homeowners surveyed by JBREC said they would accept a mortgage rate between 6.5% and 6.99% on their next home. But 47% said they would accept a mortgage rate between 5.0% and 5.5%.
Why have mortgage rates bounced up over the past week?
The latest employment reports have come in a bit warmer than expected, with the U.S. unemployment rate falling from 4.3% in July 2024 to 4.1% in September 2024. After rising from the cycle low of 3.4% in April 2023 to 4.3% in July 2024, some analysts were concerned this could signal a sharp labor market slowdown or recession. However, the latest jobs numbers have eased those fears somewhat and placed a little upward pressure on long-term yields, including mortgage rates.
This post originally appeared at fastcompany.com
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