The monthly mortgage payment on a $400,000 loan is about $2,470 compared to $1,660 a year ago, the National Association of REALTORS® reports.
The average for the 30-year fixed-rate mortgage climbed to its highest level in 14 years, remaining above 7% and hitting more home buyers’ pocketbooks. It’s the fifth time this year the Fed has taken aggressive action to try to tame 40-year-high inflation.
While mortgage rates are not directly tied to the Fed’s fund rate, the Fed’s action does often trickle down in some ways to rates. Mortgage rates are more closely connected to 10-year Treasury yields, which surged to their highest level since 2011, Freddie Mac reports. That has prompted mortgage rates to double or more their levels of a year ago.
Owners may be locked into their current loans as mortgage rates rise, and the 3% rates from last year may not be back anytime soon.
This real estate column is brought to you by Kylah Artz, a local real estate agent with Texas Urban Living, serving the DFW area.
This will certainly price out many people from ever owning a home since the rates will make the monthly payments so much higher. On top of that people are already paying so much more for rent and groceries etc they will struggle to even save anywhere near enough for down payments and closing costs for a house. That means they will be stuck in their apartments paying and rented houses paying rent for some indefinitely.