Aspiring homeowners have a new set of challenges on their hands.
Amid ballooning inflation, the average 30-year mixed mortgage rate was 7.09% during the seven-day period ending Thursday, according to data released by mortgage provider Freddie Mac as reported by Forbes.
That means mortgage payments Interest payments are now more than twice as expensive as they were last year when were sitting at 3%.
“The economy continues to do better than expected and the 10-year Treasury yield has moved up, causing mortgage rates to climb,” said Sam Khater, Freddie Mac’s chief economist in a statement. “Demand has been impacted by affordability headwinds, but low inventory remains the root cause of stalling home sales.”
The hikes come as The Fed fights to curtail rising inflation, a consequence of the pandemic-era shutdown.
“Coming out of a three-year pandemic, the economy continues to expand, boosted by solid consumer spending and business investment,” said George Ratiu, Chief Economist at Keeping Current Matters, a real estate market insights and content company. “For most Americans, the economic growth means job security and better pay checks.”
He added: “With the view of the late 1970s’ twin inflation peaks firmly in its monetary lens, the central bank remains determined to bring price growth to the 2.0% target,” he said. “Measures of core inflation are still north of 4.0%, which means that additional rate hikes are on the Fed’s monetary agenda.”
For context, someone who bought a median-priced home with 3.1% mortgage rate is paying about $1,300 a month. That monthly mortgage payment is now $2,300 month.