The most common type of loan- the thirty year fixed mortgage- has risen by 24 basis points, up to 4.95%. This puts the thirty year fixed mortgage 164 basis points up from this time last year, which is quite the substantial amount. This is the second time this week the rates have shot up which puts it on par with 2013, the most recent time that the rates have shot up by such large amounts. These soaring rates have caused demands for mortgages and refinancing loans. With all the other prices rising due to inflation it is hard for buyers to keep up and put down payments making them unqualified for mortgages which could cause issues. This could become more of an issue as the spring housing market is one of the most prominent time for home buying and people might be hesitant to do so with mortgage rates soring and uncertainty setting in. This is causing many economists to revise their estimates and sales figures for the upcoming year. This is something that should be watched closely because any market no matter how small can cause a ripple effect in the economy as a whole.
Rising mortgages will make it incredibly difficult for people to buy and keep their houses, especially after considering how many people bought houses recently due to the mortgage rate being low after Covid.
ReplyDeleteI didn't know spring time was peak time for household sales. As bad as this can get, there will always be a demand for houses. I am wondering if there would be an increase in the amount of people who rent apartments instead of buying houses, as that would be cheaper.
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