At the beginning of this year, the average interest rate on a 30-year fixed mortgage in the United States was 3.25%, but it has now soared to 6.13%, a jump of nearly 300 basis points in half a year.
The United States has recently faced the highest inflation in 40 years. The Federal Reserve is actively raising interest rates in the hope of curbing inflation. However, this has also pushed up mortgage interest rates, which has also affected the demand for the US housing market.
According to data cited by the Chinese media "Wall Street Insights", at the beginning of 2020, when the new crown epidemic broke out, mortgage interest rates on U.S. mortgage loans plummeted to the lowest level in more than 20 years. However, in March this year, since the Federal Reserve began to raise interest rates, mortgage interest rates It continues to rise based on the sharp rise.
In early January this year, the average interest rate on a 30-year fixed mortgage in the United States was 3.25%, but has now soared to 6.13%, a surge of nearly 300 basis points in half a year, setting the highest interest rate level since the real estate bubble in the United States in 2008.
Spiking interest rates have dampened homebuyer confidence, mortgage applications have plummeted, and home sales have continued to decline for months.
MBA Economist Joel Kan said housing affordability for homebuyers is falling to near record lows as mortgage costs and home prices continue to rise. The homebuying market has suffered over the past two months as housing inventory has remained depressed and mortgage rates have soared. These worsening affordability challenges have been especially tough for potential first-time homebuyers.
As mortgage rates rise, monthly mortgage payments become more expensive.
Mortgage interest rates have risen from 3.25% at the beginning of this year to 6.13%, which means that if a home buyer applies for a mortgage of US$350,000, the monthly mortgage payment required in the next 30 years will rise from US$1,523 to US$2,125, a surge of nearly 40% in half a year. %.
