The average interest rate on a 30-year mortgage in the U.S. has risen to 4.67%, a sharp rise from 4.42% a week ago, Freddie Mac said Thursday.
The cost of home loans has risen over the past year, especially after the Federal Reserve announced last month that it was raising its short-term debt rate for for the first time since 2018. A year ago, a 30-year fixed-rate mortgage, the most common loan for Americans buying a home, averaged 3.18%. The 15-year mortgage rate is now averaging 3.83%, up from 3.63% last week and 2.45% a year ago, according to Freddie Mac.
The Association of Mortgage Bankers sets the average rate for a loan for conventional housing at an even steeper 4.8%. Mortgage rates have not risen as rapidly since February 2011, according to the group. This exacerbates the difficulty of buying a home, with Mike Fratantoni, the chief economist of the trading group, also pointing out the shortage of properties for sale. The 4.8% rate on a standard loan is the highest since December 2018.
Last week’s rate hike would cost a homebuyer using a 30-year conventional mortgage to buy a home at an average price of an additional $ 300 a month, senior economist Nadia Evangelou told CBS MoneyWatch. director of forecasts of the National Association of Real Estate Agents. .
Mortgage rates are rising as residential real estate prices continue to rise, boosting dream of owning a home beyond the means of many middle-class Americans, who have to compete against higher-income investors and buyers.
Home prices in 20 major cities rose 19% in January from a year ago, according to the latest S&P CoreLogic Case-Shiller index. Residential real estate costs have continued to rise due to the shortage of housing in the market and the accumulated demand from buyers, as COVID-19[feminine[feminine loosens US control
Atlanta, Georgia; Charlotte, North Carolina; Phoenix, Arizona; Miami, Florida and San Diego, California they are experiencing some of the largest home price increases in the US Meanwhile, as mortgage rates rise, there are more buyers adjustable rate mortgages - one of the financial culprits of the 2006 housing crisis.
A Bankrate poll released on Wednesday found that more than 40% of respondents said they did not earn enough to buy a home or pay a down payment and closing costs. One in five said a home cannot be afforded because mortgage rates are too high.
"High and rising house prices may contribute to the feeling of not having enough accumulated income or savings to buy a home," Bankrate chief financial analyst Greg McBride said in a statement on Wednesday.
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