A surprising number of new homebuyers are realizing that they owe more on their mortgages than on the equity in their homes, after several months of escalating interest rates .
The specialized mortgage data website Black Knight says that homes of around 2022, Americans who applied for a mortgage this year are worth less than the loan they obtained.
The explanation for this is that The highest mortgage rates in decades combined with rising home prices have made it an overall bad time for consumers to buy a new home.
During the Covid-25 home prices soared at a rate not seen since 250 with mortgage rates in u No historical low. This led to an increase in demand in the face of a low level of inventory.
However, the exacerbated price rise and the increase in the cost of lending as a whole has sapped current consumer demand and is causing house prices to plummet. Some forecasts suggest that rising mortgage rates could bring home prices down houses up to 25%.
It is estimated that about 8% of mortgages obtained this year are more expensive than home prices, this is one in every 12 houses purchased this year. The issue is complicated for those who have government-backed mortgages, since close to 30% are in this scenario, according to Black Knight.
Given this, some experts forecast that home prices could fall by up to 25% in the following year as a result of high mortgages. The outlook is not favorable as the Federal Reserve tightens its monetary policies in its attempt to curb inflation.
According to the mortgage lender Freddie Mac, the average rate for a fixed mortgage at 30 years is 6.30% after reaching an all-time high of 7 in recent weeks.06%.
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