Mortgage Rates Are Rising: The Average 30-Year Mortgage Now Costs $33K More
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Buying a new house is as exhilarating as it is excruciating. On one hand, you’re excited to start a new chapter in your life. On the other hand, the whole process can be very overwhelming. Especially as it pertains to your finances, credit checks and securing a loan. And the last thing you want to learn is that you decided to buy a house just as mortgage rates start rising again. Because of course you did!
What Is Going On With Mortgage Rates?
According to MarketWatch
The 30-year fixed-rate mortgage averaged 3.18% for the week ending April 1, up one basis point from the previous week, Freddie Mac FMCC, -1.46% reported Thursday. It’s the seventh consecutive week in which the benchmark mortgage rate has climbed, and the rate now stands at the highest level since June 2020.
The 15-year mortgage and the 5-year Treasury-indexed hybrid adjustable-rate mortgage both remained unchanged over the past week, at 2.45% and 2.84% respectively.
The demand for housing is starting to see a pullback. At least according to Sam Khater, the chief economist at Freddie Mac, it is.
“Although mortgage rates remain low, we are beginning to see a pullback by those looking to enter the housing market. This is confirmation that while purchase demand remains strong, the marginal buyer is feeling the affordability squeeze resulting from the increases in mortgage rates and home prices.”
That logic makes sense, but you also have to consider that we are starting to turn a corner as a country. And as the world gets back to normal, and people stop fleeing cities for the suburbs, the housing market is bound to take a hit in demand.
The Bad News For Home Buyers
Mortgage rates are rising and adding $33,000 on average to a 30-year loan
The Good News For Home Buyers
Mortgage rates are still incredibly reasonable. Plus, there are 360 payments over the course of 30 years. That means an additional $33,000 is only about $91 per month. What we’re saying is… don’t panic! While $33,000 is a large lump sum, paid monthly over the course of 30 years it isn’t that painful.