Homebuyers are currently contending with the highest mortgage rates in nearly 13 years. Even after hitting 5%, mortgage rates are continuing to tick up. Last week, the average 30-year fixed weekly rate clocked in at 5.27%.

It’s unclear how much further they could rise. If you’re getting ready to start the homebuying process, be prepared to adjust your budget as rates increase.

“If rising rates have cut into your affordability, take a look at what you can afford now,” says Robert Heck, vice president of mortgage at Morty. “We’ve seen a number of buyers compromise successfully over the past month, which can be frustrating in the moment but help advance your longer term homeownership goals.”

Today’s mortgage rates
Today’s refinance rates
Mortgage calculator

Use our free mortgage calculator to see how today’s mortgage rates will affect your monthly and long-term payments.

By plugging in different term lengths and interest rates, you’ll see how your monthly payment could change.

Are mortgage rates going up?

Mortgage rates started ticking up from historic lows in the second half of 2021, and will likely continue to increase throughout 2022.

In the last 12 months, the Consumer Price Index rose by 8.5%, the fastest rate of inflation since 1981. The Federal Reserve has been working to get inflation under control, and plans to increase the federal funds target rate five more times this year, following increases in March and May.

Though not directly tied to the federal funds rate, mortgage rates are often pushed up as a result of Fed rate hikes. As the central bank continues to tighten monetary policy to lower inflation, it’s likely that mortgage rates will remain elevated.

  New bike safety measures implemented to Rickenbacker Causeway

What do high rates mean for the housing market?

When mortgage rates go up, home shoppers’ buying power decreases, as more of their anticipated housing budget has to go toward paying interest. If rates get high enough, buyers can get priced out of the market completely, which cools demand and puts downward pressure on home price growth.

However, that doesn’t mean home prices will fall — in fact, they’re expected to rise even more this year, just at a slower pace than what we’ve seen in the past couple of years.

Even though high rates slow demand, low inventory will keep pushing prices up, says Ralph DiBugnara, president of Home Qualified and senior vice president of Cardinal Financial.

“There’s such a shortage that even if 50% of the people stop looking today, you would still have a high demand,” he says. “So I just think that because of that demand, you’re going to see prices rise for at least another 18 to 24 months.” 

What is a good mortgage rate?

It can be hard to know if a lender is offering you a good rate, which is why it’s so important to get preapproved with multiple mortgage lenders and compare each offer. Apply for preapproval with at least two or three lenders.

Your rate isn’t the only thing that matters. Be sure …read more

Source:: Business Insider

      

(Visited 2 times, 1 visits today)
News

Leave a Reply

Your email address will not be published. Required fields are marked *