https://sputnikglobe.com/20220414/mortgage-rates-above-5-highest-in-more-than-a-decade-1094766785.html
US Mortgage Rates Above 5%, Highest in More Than a Decade
US Mortgage Rates Above 5%, Highest in More Than a Decade
Sputnik International
A large number of first time home buyers, combined with the supply chain issues and construction halts brought on by the COVID-19 pandemic, caused housing... 14.04.2022, Sputnik International
2022-04-14T17:34+0000
2022-04-14T17:34+0000
2022-04-14T17:46+0000
interest rates
home ownership
real estate
federal reserve
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Mortgage rates have risen by 2% since the start of the year, pushing them higher than 5% for the first time in eleven years.That, combined with record high home prices, are making it harder than ever for Americans to buy their first home. Just a year ago the interest rate was 3.04%, and it was even lower in 2020. But in an attempt to bring housing prices down and fight inflation by making borrowing more difficult, the Federal Reserve has been gradually increasing interest rates.That strategy may pay off; online searches for “homes for sale” have dropped 10% recently, but the immediate result is a combination of high home prices and high interest rates that are pricing many first time home buyers out of the market. The median price of a home has risen from $209,200 in December 2020 to $357,300 today.With the 2% increase, borrowers will be paying an additional $115 per month for every $100,000 financed. Adding in the increase in housing prices and buyers could be spending $600 or more extra per month for the same house.The low rates buyers enjoyed before this year are credited with helping revive the housing market after the 2008 crash. However, while construction slowed due to the COVID-19 pandemic and supply chain issues, scores of people started looking to move to houses that better fit America’s increasingly remote work habits, causing prices to skyrocket.While relief may not be coming anytime soon, the trend is still moving upwards and 5% is not the highest we have seen in relatively recent times. In 2007 and 2008, interest rates exceeded 6%.
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interest rates, home ownership, real estate, federal reserve
interest rates, home ownership, real estate, federal reserve
US Mortgage Rates Above 5%, Highest in More Than a Decade
17:34 GMT 14.04.2022 (Updated: 17:46 GMT 14.04.2022) A large number of first time home buyers, combined with the supply chain issues and construction halts brought on by the COVID-19 pandemic, caused housing prices to skyrocket through 2021 and early 2022. The Federal Reserve is responding by raising interest rates.
Mortgage rates have risen by 2% since the start of the year, pushing them higher than 5% for the first time in eleven years.
That, combined with record high home prices, are making it harder than ever for Americans to buy their first home. Just a year ago the interest
rate was 3.04%, and it was even lower in 2020. But in an attempt to bring housing prices down and fight inflation by making borrowing more difficult, the Federal Reserve has been gradually increasing interest rates.
That strategy may pay off; online searches for “homes for sale” have
dropped 10% recently, but the immediate result is a combination of high home prices and high interest rates that are pricing many first time home buyers out of the market. The median price of a home has risen from $209,200 in December 2020 to $357,300 today.
With the 2% increase, borrowers will be paying an additional $115 per month for every $100,000 financed. Adding in the increase in housing prices and buyers could be spending $600 or more extra per month for the same house.
The low rates buyers enjoyed before this year are credited with helping revive the housing market after the 2008 crash. However, while construction slowed due to the COVID-19 pandemic and supply chain issues, scores of people started looking to move to houses that better fit America’s
increasingly remote work habits, causing prices to skyrocket.
While relief may not be coming anytime soon, the trend is still moving upwards and 5% is not the highest
we have seen in relatively recent times. In 2007 and 2008, interest rates exceeded 6%.
