Mortgage rates surge higher, further hurting demand

Published On Oct 10, 2024, 12:46 PM

Mortgage rates have surged to 6.32%, marking the largest increase since April, which has contributed to a decline in demand for mortgages for the second consecutive week. This jump in rates comes after a stronger-than-expected jobs report, causing prospective buyers to hesitate as affordability becomes a significant concern. The current economic strength is supporting overall housing market recovery despite these challenges. Many homeowners are choosing to hold onto their lower-rate mortgages, complicating market dynamics.

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Stock Forecasts

AI prediction results, not representative of any investment advice.

DHI View DHI chart on TradingView

Negative

The surge in mortgage rates indicates a cooling demand in the housing market, which could negatively impact companies involved in home construction and sales, such as D.R. Horton and Lennar. Additionally, the pressure on home sales might affect mortgage providers like Rocket Companies.

VNQ View VNQ chart on TradingView

Positive

Investors may consider hedge opportunities in real estate investment trusts (REITs) focusing on rental properties which could see demand as fewer people buy homes due to high mortgage rates. Rental demand may remain strong, benefiting relevant REITs.

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