Posted on Aug 18, 2023
30-year-fixed-rate-mortgage-reaches-its-highest-level-over
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Mortgage Rates Rise
The average rate for the most common type of mortgage in the US has risen to almost 7.1%, according to data from a survey of lenders made by mortgage financing giant Freddie Mac. The figure—for 30-year fixed-rate loans—is the highest since December 2001 and is up two percentage points over the past year (and more than 4.4 points from the all-time low seen in January 2021).
Among other factors, mortgage rates are influenced by the Federal Reserve, which hiked the federal funds rate from 0% to 5.25-5.5% over the past year and a half in an effort to fight inflation. Higher mortgage rates mean higher costs for would-be homebuyers and tend to cause a slowdown in the housing market. Sales of existing homes dropped by almost 19% year-over-year in June, according to reports—though the median price increased to $410K, close to an all-time high.
For context, a buyer making a 20% down payment on the median-priced house would pay $465K in interest over the life of a 30-year fixed-rate mortgage (see calculator)—more than the cost of the house itself. https://www.mortgagecalculator.org/
The average rate for the most common type of mortgage in the US has risen to almost 7.1%, according to data from a survey of lenders made by mortgage financing giant Freddie Mac. The figure—for 30-year fixed-rate loans—is the highest since December 2001 and is up two percentage points over the past year (and more than 4.4 points from the all-time low seen in January 2021).
Among other factors, mortgage rates are influenced by the Federal Reserve, which hiked the federal funds rate from 0% to 5.25-5.5% over the past year and a half in an effort to fight inflation. Higher mortgage rates mean higher costs for would-be homebuyers and tend to cause a slowdown in the housing market. Sales of existing homes dropped by almost 19% year-over-year in June, according to reports—though the median price increased to $410K, close to an all-time high.
For context, a buyer making a 20% down payment on the median-priced house would pay $465K in interest over the life of a 30-year fixed-rate mortgage (see calculator)—more than the cost of the house itself. https://www.mortgagecalculator.org/
30-year-fixed-rate-mortgage-reaches-its-highest-level-over
Posted from freddiemac.gcs-web.com
Housing
Money
Home Loan
Mortgage
Edited >1 y ago
Posted >1 y ago
Responses: 3
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Who can afford housing any more,Even rent ,My Rent went from ,$545.00 - $ 875.00, and my bills are in a while wind cause of it,I takened aback and do not see the end in site,Outside trusting God,
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Lt Col Charlie Brown
Wow...that's quite the jump. We're dealing with real estate taxes here...ours have more than doubled over the past five years
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Since I am in the new home building side of things, some big things that aren't interest rate dependent. First is that the average size home is now around 2400 sq ft, and it's larger than that in some markets (mine). There just aren't any 1000-1400 sq ft homes being built. 2. Lot and utility prices at through the roof. 3. In many, maybe most markets, that homeowner is competing with private equity firms that either have capital or can get a better rate than the prospective homeowner. That one is really becoming an issue in some locations and it amazes me that it isn't more of a political issue today. 5. Home Prices to Income ratio is horrible and getting worse.
https://www.longtermtrends.net/home-price-median-annual-income-ratio/
https://www.longtermtrends.net/home-price-median-annual-income-ratio/
Home Price to Income Ratio (US & UK) - 75 Year Chart | Longtermtrends
Historically, an average house in the US cost around 5 times the yearly household income. The ratio in this chart divides the Case-Shiller Home Price Index by the US median annual household income.
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