Skyrocketing interest rates are devastating home sale agreements.
OAN’s Daniel Baldwin
10:30 AM – Monday, October 23, 2023
New data from Redfin has revealed that over 16% of home-purchase agreements were canceled in September 2023. This marks the highest number since October 2022. This surge comes as the 30-year fixed mortgage rate reached 8% for the first time since 2000.
“The reason why the Fed is increasing interest rates, as they say, is because they’re spending so much money and the Fed has to increase their Fed funds rate to drive down inflation,” said Bob Rubin, the founder and president of Rubin Wealth Advisors. “When you increase those Fed funds rates, well guess what? You’re increasing mortgage rates.”
About 53,000 home sales were canceled, according to data from Redfin. In comparison, the 30-year mortgage rate was 2.65% in January 2021 when former President Donald Trump left office. Rubin argues that flipping the White House in 2024 is the best solution to combat these soaring interest rates.
“I would have to say that electing a fiscally conservative Republican as the next POTUS is vital to restoring economic stability, reducing government intervention, and promoting policies that prioritize the prosperity of the American people,” Rubin told One America News.
According to Yahoo Finance, the median U.S. home price surged by $106,392 in the third quarter of 2023 compared to the same period in 2019.
“Biden’s economic policies have led to runaway spending and record high mortgage rates,” Rubin said. “They’re causing significant financial strain on the average hardworking America.”
Homeowners now need to earn $114,627 to afford a median-priced home in the U.S., according to Redfin. The median family income in the U.S. was less than $75,000 in 2022, per the US Census Bureau.
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What are the primary causes behind the surge in canceled home-purchase agreements?
Title: Surge in Canceled Home-Purchase Agreements and Soaring Mortgage Rates Raise Concerns
Introduction:
New data from Redfin has revealed a concerning trend in the housing market, as over 16% of home-purchase agreements were canceled in September 2023. This surge marks the highest number since October 2022, coinciding with the 30-year fixed mortgage rate reaching 8% for the first time since 2000. The implications of these developments are significant, impacting both homebuyers and the broader economy.
Causes of Canceled Home-Purchase Agreements:
The primary driver behind the surge in canceled home-purchase agreements is the increase in mortgage rates. As the Federal Reserve seeks to combat rising inflation by raising interest rates, mortgage rates have consequently increased. Bob Rubin, the founder and president of Rubin Wealth Advisors, explains that when the Fed funds rates rise, mortgage rates follow suit. This correlation between interest rates and canceled home sales underscores the importance of understanding the broader economic context.
Trump Era Comparison:
To put the situation in perspective, data from Redfin shows that approximately 53,000 home sales were canceled in September 2023. By comparison, the 30-year mortgage rate stood at a mere 2.65% in January 2021 when former President Donald Trump left office. Rubin argues that the solution lies in electing a fiscally conservative Republican as the next President in 2024, suggesting that this would restore economic stability, reduce government intervention, and prioritize the prosperity of the American people.
Escalating Home Prices:
Furthermore, Yahoo Finance reports that the median U.S. home price surged by $106,392 in the third quarter of 2023 compared to the same period in 2019. This substantial increase puts even more strain on potential homebuyers who are already grappling with soaring mortgage rates. The combination of rising prices and higher interest rates has made it increasingly challenging for the average American to afford a home.
The Impact on Average Americans:
According to Redfin, homeowners now need to earn $114,627 to afford a median-priced home in the U.S., while the median family income in 2022 was less than $75,000 according to the US Census Bureau. These figures demonstrate the growing financial strain on hardworking Americans caused by President Biden’s economic policies and the resulting high mortgage rates. It is imperative to address these issues to protect the financial well-being of the American people.
Conclusion:
The alarming surge in canceled home-purchase agreements and the concurrent increase in mortgage rates demand the urgent attention of policymakers and industry experts alike. While economic factors play a significant role in this housing market crisis, it is essential to consider comprehensive strategies to alleviate the burden on potential homebuyers. Taking into account the impact of housing policies and the need for fiscal responsibility, policymakers must formulate measures that promote economic stability, reduce intervention, and empower Americans to achieve homeownership without undue financial strain.
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