Mortgage rates reached a 7 year high of 5% in 2018. However, we’ve been on a steady decline in 2019. As of this week, the 30-year-fixed-rate mortgage average is 3.93%. The 15-year adjustable-rate mortgage average is 3.64%. This type of mortgage always has a lower rate because it’s less secure and will fluctuate with the interest rate. What do changing rates mean for the Real Estate market? Lower rates mean it is more advantageous to sell and then buy a home. The big hope in the Minnesota market is an influx of people selling first to raise the inventory. We currently don’t have near enough homes to meet demand. A countrywide low supply and rising prices are putting pressure on the market.

Mortgage Conditions

A positive sign is mortgage applications rose 1.6% showing people have interest in buying a home. Surveys by Realtor.com list debts, such as student loans, credit card balances, and medical debt, as a big reason people aren’t buying right now. The source lists debts impacting 26% of Generation X, 36% of Millennials, and 35% of Generation Y demographic. A long standing problem in the market is a lack of affordable housing, which has been steadily growing. National Mortgage News states, “The shortage of affordable homes that followed the financial crisis a decade ago is something that has been exacerbated by higher mortgage rates over the past few years.” Freddie Mac says 46% percent of mortgage seekers are first-time homebuyers.