Mortgage Rate Tops 6% for First Time Since 2008
September 16, 2022 from Floor Focus FloorDaily News
New York, NY, September 16, 2022 – “Mortgage rates topped 6% this week, their highest level since 2008, giving a jolt to home buyers who last year were paying less than half that,” reports the Wall Street Journal.
“The average rate on a 30-year fixed mortgage climbed to 6.02% this week, up from 5.89% last week and 2.86% a year ago, according to a survey of lenders released Thursday by mortgage giant Freddie Mac. The last time rates were this high was in the heart of the financial crisis almost 14 years ago, when the U.S. was deep in recession.
“The jump in mortgage rates is one of the most pronounced effects of the Federal Reserve’s campaign to curb inflation by lifting the cost of borrowing for consumers and businesses. Already, it has ushered in a sea change in the housing market by adding hundreds of dollars or more to the monthly cost of a potential buyer’s mortgage payment, slowing what was a red-hot market not so long ago. Higher rates are forcing some would-be buyers to continue renting. Other buyers are skimping elsewhere to make their mortgage payments.
“The Fed is in a delicate dance. Investors hope it can cool the economy without tipping the U.S. into recession. The Fed is expected to keep raising rates aggressively when it meets next week, especially after Tuesday’s inflation report showed that consumer prices are still rising quickly.
“A borrower who buys a $500,000 house with a 20% down payment and a rate of 2.86% could expect to pay about $200,000 in interest over 30 years for their $400,000 loan. If their rate is 6.02%, they could pay $465,000 in interest, according to a mortgage calculator by Bankrate.com.”