Fewer and fewer people are buying homes, a sign that homebuyers are being priced out of the market due to Mortgage rates soarspiked to an average of 5% this week on 30-year fixed-rate mortgages.
Interest rates on fixed-rate mortgages jumped 0.28% just last week, hitting a high not seen since February 2011. According to the government mortgage lender Freddie Mac. One year ago, 30 year rate average 3.04%nearly 2% lower than the current level.
That 2% difference can add hundreds of dollars to the monthly cost of financing a home, making it impossible for some potential buyers.
For a $408,100 home – average house price in the US – with 20% down payment, 30 year fixed mortgage and 5% interest, monthly mortgage cost would amount to $1,752.62, according to CNBC calculations.
But for the same home bought last year, when the interest rate was 3.04%, the monthly mortgage payment would come in at just $1,383.51, according to CNBC calculations. That’s almost $400 less per month and $4,400 less per year.
There are signs that the market is cooling down somewhat
