Mortgage rates top 7% for first time since 2002
CLEVELAND, Ohio — Interest rates continue to rise in the U.S., surpassing 7% for the first time in 20 years
The average rate on a 30-year fixed mortgage was 7.08% Thursday, up from 6.94% a week ago, according to Freddie Mac , a government-sponsored home-loan agency. Rates on a 15-year fixed mortgage were 6.36%, down from 6.23% last week.
Rates have skyrocketed since January, when the 30-year rate averaged 3.22% and a 15-year rate averaged 2.43%.
“The 30-year fixed-rate mortgage broke 7% for the first time since April 2002, leading to greater stagnation in the housing market,” said Sam Khater, Freddie Mac ’s chief economist.“As inflation endures, consumers are seeing higher costs at every turn, causing further declines in consumer confidence this month. In fact, many potential homebuyers are choosing to wait and see where the housing market will end up, pushing demand and home prices further downward.”
What this rate change means in dollars
The difference in interest rates can cost homebuyers thousands of dollars over the life of a loan.
On a fixed rate 30-year loan at 7.08%, a buyer would pay $1,006 a month in principal and interest for a $150,000 loan. Interest would add up to $212,000 over 30 years.On a fixed rate 30-year loan at 3.22%, the average at the beginning of 2022, a buyer would pay $650 a month in principal and interest on that same amount. Interest would add up to $84,000 over 30 years.
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CLEVELAND, Ohio — Interest rates continue to rise in the U.S., surpassing 7% for the first time in 20 years
The average rate on a 30-year fixed mortgage was 7.08% Thursday, up from 6.94% a week ago, according to Freddie Mac, a government-sponsored home-loan agency.
Rates have skyrocketed since January, when the 30-year rate averaged 3.22% and a 15-year rate averaged 2.43%.
“The 30-year fixed-rate mortgage broke 7% for the first time since April 2002, leading to greater stagnation in the housing market,” said Sam Khater, Freddie Mac’s chief economist.
“As inflation endures, consumers are seeing higher costs at every turn, causing further declines in consumer confidence this month. In fact, many potential homebuyers are choosing to wait and see where the housing market will end up, pushing demand and home prices further downward.”
What this rate change means in dollars
The difference in interest rates can cost homebuyers thousands of dollars over the life of a loan.
