March 25, 2019 – Less than six months ago, mortgage rates marched above 5 percent – the first time in seven years – and for weeks showed no signs of abating.
It was a tipping point for house hunters. Beaten down by rising prices, meager housing choices and bidding wars, they saw rates as one more obstacle and called it quits, causing sales to plummet, even in the hottest of U.S. markets.
“It was somewhat of a surprise to see the degree and intensity of the pullback,” said Robert Dietz, chief economist of the National Association of Home Builders. “Five percent at those pricing levels was enough to take the wind out of sails of the housing market.”
Enter Federal Reserve Chairman Jerome Powell, who in December promised patience on further interest rate hikes and, on Wednesday, predicted that rates wouldn’t budge for the rest of the year.
Mortgage rates are at 4.5 percent and aren’t forecast to rise much for this year.