U.S. mortgage interest rates jump to 7.16%, highest since 2001
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Re: U.S. mortgage interest rates jump to 7.16%, highest since 2001
#2This rate is for a 30-year fixed rate mortgage, and more a reflection of the uncertainty for that period of time and not something that will necessarily influence shorter-term lending rates.
Re: U.S. mortgage interest rates jump to 7.16%, highest since 2001
#3The article says rates have more than doubled since the beginning of the year. Uaing a mortgage calc for $400k and 20% down:
3.58% = $522k, or $202k in interest
7.16% = $778k, or $458k in interest
Re: U.S. mortgage interest rates jump to 7.16%, highest since 2001
#4This rate is for a 30-year fixed rate mortgage, and more a reflection of the uncertainty for that period of time and not something that will necessarily influence shorter-term lending rates.
That could lead to a problem if people are betting on a refinance…
Re: U.S. mortgage interest rates jump to 7.16%, highest since 2001
#5This will pressure prices down presumably which is a good thing for cash buyers but basically no one else.
Re: U.S. mortgage interest rates jump to 7.16%, highest since 2001
#6No post body was provided.
Re: U.S. mortgage interest rates jump to 7.16%, highest since 2001
#7If rates go from a low of 2% up to, say, 9%, then in order to keep the mortgage payment the same, the price of a $400,000 house would have to drop to around $230,000. This assumes a 30-year fixed rate mortgage, and the details will vary depending on money down, etc. but the basic fact remains that house prices will need to fall by a lot, down to levels of 5 years ago or more, before the current interest rate hiking cycle ends.
I don't think most people who invested in housing in the last couple years, are ready to believe that yet.
Re: U.S. mortgage interest rates jump to 7.16%, highest since 2001
#8The difference is higher inflation, which likely leads to higher pay rises, so actually the real interest rate is lower than it was.
Re: U.S. mortgage interest rates jump to 7.16%, highest since 2001
#9This will pressure prices down presumably which is a good thing for cash buyers but basically no one else.
No post body was provided.
Re: U.S. mortgage interest rates jump to 7.16%, highest since 2001
#10This will pressure prices down presumably which is a good thing for cash buyers but basically no one else.
Post correction it makes homes more affordable as it lowers the down payment requirement. It also helps people build equity after a refinance at eventual lower interest trades etc.
There are a bunch of effects that make very low long term interest rates surprisingly bad for long term economic growth.