Posted on 08/17/2023 6:33:35 PM PDT by lasereye
Home mortgage rates have surged past 7%, hitting the highest level in more than 20 years and dealing another blow to Americans trying to break into the housing market.
The average rate on the popular 30-year fixed mortgage was 7.09% this week, up from 6.96% last week and the highest since 2002, according to data released Thursday from mortgage giant Freddie Mac.
One month ago rates were at 6.78% and for much of the year held in the low-to-mid-6% range.
But borrowing costs have been on the rise lately. Inflation is a major driver of mortgage rates and amid continued economic growth investors increasingly think inflation will prove stickier than they hoped.
Those investment bets have a big effect for potential home buyers.
The difference between a 6.78% rate and a 7.09% rate adds an extra $133 to the monthly mortgage payment for an $800,000 house. Compared with where rates were in early February, today’s payment is $422 more for the same priced house.
The last time rates were higher than today was in 2002, but they briefly hit 7.08% — just under this week’s levels — in fall of last year.
At the time rates were exploding, more than doubling in a year as inflation soared and the Federal Reserve reversed easy money policies.
The rapid rise quickly sapped buyer borrowing power and caused home prices to fall. But today’s buyers face a different market — one where prices are rising.
After rates fell into the 6% range this year, a fair number of first-time home buyers returned. But existing homeowners were less willing to list their homes and give up their sub 3% mortgages.
The result has been an extreme shortage of homes for sale that’s once again driving up prices.
(Excerpt) Read more at latimes.com ...
more to come
Stagflation be comin bak
I had to pass two job opportunities because of this, since it would have required us to move away. Houses are way over-priced right now, plus %7 interest rate? Yeah, forget it, the wage increase I was going to receive, which was significant for a guy like me, would have been eaten up in mortgage costs and then some. I calculated we would have lost money, so we just stayed here.
Undo quantitative easing by having the Fed sell those securities that they bought a decade ago (never gonna happen)
Increase production by cutting taxes on business (never gonna happen).
So we are left with rising interest rates, rising mortgage rates, and the march to a recession.
I need 10% rates to buy my next house...since that will finally bring down prices.
The Magic Mortgage Rate Number to Tip the Housing Market
Bidenomics - bringing misery to the people of the United States - EXCEPT THE GRIFTERS RUNNING DC - AND LIVING IN SOME OF THE WEALTHIEST ZIP CODES IN THE COUNTRY - THOSE CLUSTERED AROUND WASHINGTON DC. Those folks are doing very well under Biden.
Gonna make Cahtuh look like a mental genius.
You could have rented while waiting for rates to come down. But maybe they won’t come down much any time soon.
Granted, current rates prompt sticker shock compared with the past decade. In 1998 I was pleased with 7.125%. Within 5 years, grabbed a refi at 4.5%.
I’m not worried!🥱
You folks with a little help from the government are going to pay off my mortgage!👍
Rent = $1,800 - 2,400 etc...It was truly debilitating, the amount of money. I only pay around $500 in my mortgage here. I couldn’t have covered the increase.
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