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The housing market in the US has not been able to cool down yet

Le Minh (Resident of Vietnam Television Station in the US)Friday, April 1, 2022 11:36 GMT+7

Loan interest rate buy a house in the US now has risen to a high not seen since 2018 and is the highest level in the last 40 years. Normally this will help the housing market in the US cool down, but the reality is not happening like that.

The Washington Post article cited data just released by Freddie Mac on Thursday showing that the average 30-year home loan interest rate has now climbed to 4.67%. Last week, this interest rate was 4.42% and in the same period last year it was 3.18%.

The 15-year home loan interest rate also increased to 3.83% from 3.63% last week and 2.45% last year. With a term of 5 years, the interest rate is currently at 3.5%, compared with 3.36% last week and 2.84% last year.

According to the Wall Street Journal, the current spike in home loan interest rates is predictable given the record low interest rates during the two years of the pandemic along with concerns about inflation in the US as well as is opening a record high. But what was unpredictable was that the market did not move as expected.

According to the article, usually the higher the interest rate, the slower the housing market activity. But according to data from the Association of Mortgage Bankers, the number of home loan applications has continued to increase by 8% in the past 3-4 weeks, showing the heat of the housing market. America will not calm down for a long time.

With the same comment, The New York Times pointed out the reasons why the US housing market did not perform as expected when home loan interest rates increased.

Specifically, for the first time in 40 years, home loan interest rates increased along with rising house prices and rising inflation. The main reason is said that the US is currently facing a serious shortage of housing supply. Meanwhile, the sudden increase in the number of people working from home has increased the demand for housing in the US.

In addition, the forecast that home loan interest rates will continue to increase further motivates those who need a home to buy a home to avoid high interest rates in the future.

The increase in house prices and the increase in home loan interest rates have forced many people to rent houses to live in. This, in turn, makes housing prices in the US currently skyrocketing. That situation pushes many people with stable incomes to switch to buying houses.

According to experts, all of the above factors will make the US housing market not be able to cool down in the near future.

Home prices in the US have increased to unprecedented heights Home prices in the US have increased to unprecedented heights

VTV.vn – Homebuyers and renters in the US are facing a difficult reality not seen in nearly half a century when home prices and rentals in the country increased at a record fast rate.

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