The leaders of Japan and China got off to a tense start but have made significant progress in turning around their relations in recent years.Asia Politicsread more
Tech's hottest IPOs of the year, including Beyond Meat and Zoom, dropped on Monday, falling more than the broader market.Technologyread more
Citi Private Bank says it has maintained an "overweight" stance on stocks in China, Hong Kong, Taiwan and South Korea.Asia Marketsread more
Stocks in Asia slipped on Tuesday, while investors looked toward a meeting between U.S. President Donald Trump and Chinese President Xi Jinping set to happen later in the...Asia Marketsread more
A week of dovish fireworks out of the central banking community has just gone by with most of the world's leading central banks now guiding towards easing in light of downside...Commentaryread more
"We do not seek conflict with Iran or any other country," Trump tells reporters in the Oval Office.Politicsread more
Chinese Vice Premier Liu He held a phone conversation with U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin, China's Ministry of Commerce...World Economyread more
Sen. Bernie Sanders announced a plan Monday to forgive the country's $1.6 trillion outstanding student loan tab, intensifying the higher education policy debate in the 2020...Personal Financeread more
While earnings usually come in substantially ahead of expectations — as much as 4 or 5 percentage points is not unusual — the downward direction in the outlook doesn't speak...Earningsread more
U.S. President Donald Trump's senior adviser Kellyanne Conway will not testify before the House of Representatives Oversight Committee this week on her alleged violations of...Politicsread more
"We missed being the dominant mobile operating system by a very tiny amount. We were distracted during our antitrust trial. We didn't assign the best people to do the work,"...Technologyread more
Mortgage rates are now at their highest level in four years and poised to move even higher. The timing couldn't be worse, as the usually busy spring housing market kicked into gear early this year amid higher home prices and strong competition for a record low supply of homes for sale.
Add it all up, and affordability is starting to hurt.
The average rate on the popular 30-year fixed is now right around 4.50 percent, still low when looking historically, but buyers over the past six years have gotten more used to rates in the 3 percent range. Mortgage rates have not been at 5 percent since 2011.
A 5 percent rate would cause more than a quarter of today's homebuyers to slow their plans, according to a Redfin survey of 4,000 consumers at the end of last year. Just 6 percent said they would drop their plans to buy altogether. About one-fifth of consumers said 5 percent rates would cause them to move with more urgency to purchase a home, fearing rates would rise even further. Another fifth said they would consider more affordable areas or just buy a smaller home.
Despite rate concerns, the bigger issue for buyers is changes to tax laws that had lowered the cost of homeownership. Specifically, the deduction on property taxes is now limited to $10,000. While that does not affect homeowners in the majority of the country, it does hit those in high-cost states like New York, New Jersey and Illinois, and those in higher-priced housing markets like California.
Some have claimed that higher rates and the new tax law will put downward pressure on home prices, alleviating some of the current sticker shock, but other factors are fighting that assertion.
"Tight credit, lack of inventory and high demand are the major factors that tell us there's no housing bubble, despite rapid price increases," said Redfin's chief economist, Nela Richardson. "There are still many more buyers than the current housing supply can support, with no major relief in sight."
Unlike during the last housing bubble in the mid-2000s, mortgage lenders today are much more strict with regard to the borrower's ability to repay the loan. They are required by new regulations in the industry to be that way. Higher mortgage rates may mean some borrowers on the margins will not qualify for the size of the loan they need or want.
Mortgage rates have been quite volatile in recent weeks especially given the wide swings in the stock market. Rates loosely follow the yield of the 10-year Treasury, which moved higher again Monday. Things could change Wednesday, with the release of the monthly read on the consumer price index.
"The most informative and disconcerting reaction would be a weak CPI reading followed by a knee-jerk rally that then gives way to more selling. That would be the worst case scenario in terms of implications for the bigger picture," wrote Matthew Graham, chief operating officer of Mortgage News Daily. "Conversely, an eventual rally that follows stable or stronger CPI would suggest bonds are increasingly ready to hold their ground near current levels."