Mortgage Rates Hit 12-Year High; Homebuyers Take a Hit

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The woes continue to mount for the housing market, especially prospective homebuyers.

The latest bad news: the 30-year fixed-rate mortgage averaged 5.30% in the week ended May 12, the highest since July 2009, according to housing agency Freddie Mac. That compares to 5.27% a week earlier and 2.94% a year earlier.

This means a year ago, homebuyers were paying $294 in annual interest on every $10,000 of their mortgage loan, compared to $530 now. That’s an 80% increase.

“The run up of mortgage rates since beginning of the year has the same impact on affordability as an increase in home prices of more than 20%,” Greg McBride, chief financial analyst at Bankrate.com, told Bloomberg.

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