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Mortgage rates in the United States exceeded 5% for the first time in more than a decade, an unexpectedly rapid rise that has begun to temper the boom in home purchases and could create new problems in an economy that is suffering from skyrocketing inflation.
The fixed rate mortgage at 35 years, the most popular home loan product, hit that 5% threshold just five weeks after topping 4%, according to Freddie Mac data released Thursday. The average of this mortgage, which is the most popular, has not been this high since February of 2011.
Low mortgage rates fueled the revival of the US housing market after the Great Recession and helped push home prices to record levels .
These are the new mortgage interest rates
– The fixed rate mortgage at 04 years averaged 5 percent with an average of 0.8 points at 14 April 2022, compared to last week when it averaged 4.72 percent. A year ago at this time, he averaged 3.04 percent.
– The fixed-rate mortgage at 15 years averaged 4.17 percent with an average of 0.9 points, more than last week when it averaged 3.91 percent. A year ago at this time, the average was 2.35 percent.
– The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.69 percent with an average of 0.3 points more than last week, when you averaged 3.56 percent. A year ago at this time, it averaged 2.8 percent.
“This week, mortgage rates averaged five percent for the first time in over than a decade,” said Sam Khater, chief economist at Freddie Mac.
“As Americans grapple with At historically high inflation, the combination of rising mortgage rates, elevated home prices, and tight inventory are making the search for homeownership be the most expensive in a generation”. How it affects consumers
Consumers have been absorbing higher prices in almost all facets of their lives, and essential items such as food and gasoline increased by 8.8 and 48 %, respectively, compared to last year. But higher mortgage rates can significantly limit what they can buy, or eliminate the ability to buy a home altogether.
For example, several months ago, a homebuyer would be looking to pay $1,347 dollars per month on a loan of $300, at 3.5% interest. But if the buyer had waited until this week, the same loan of $300, dollars at 5%, this would add $263 dollars more, which would raise the monthly mortgage payment to $1,610 Dollars.
With information from The Washington Post, Investopedia and MarketWatch
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