If among the plans for 2022 was buying a house, now it will be a little more expensive because mortgage rates have risen again, and he sets it at 30 years is now at the highest level since April 2020, CNBC reported.
Matthew Graham, chief operating officer of Mortgage News Daily, commented that rates are approaching a full percentage point gain from a year ago, while some lenders will be at 3.625%, many others are already applying 3.75%.
The average rate of the popular fixed mortgage to 30 years reached 3.7% on Tuesday, which means the highest level high since early April 2020 and now 83 basis points more than in the same period a year ago.
Graham explained that mortgage rates “ would be higher, but lenders are compressing s us margins to compete in an environment of rising rates. Some will be at 3,625 %, but many are already at 3.75 %”.
According to the analyst, lenders are losing large amounts of refinancing business, which had been booming a year ago, when rates were lower. Applications to refinance a home loan are down 50% from a year earlier, according to the latest weekly survey from the Mortgage Bankers Association.
During 2020 mortgage rates set more than a dozen record lows, causing homebuyer demand to rise even higher.
Buying a house will now be more complicated, because with the additional purchasing power provided by low rates, sellers increase prices due to the low supply of homes for sale, and those prices are now in double digits more than a year ago.
The prices of new and used houses are today at record levels, and there is still not enough supply to balance the market.
The increase in rates is bad for the spring housing market, which is usually a good season. New construction buyers are also concerned that contract-to-closing times are now longer due to labor issues and supply chain disruptions. And those buyers can’t lock in rates until they sign their contract.
Buyers of existing median-priced homes, which now hover around $350,000, they now expect monthly payments of about $125 more than they would have paid just a few months ago.
This situation may cause some to leave the market, especially first-time buyers.
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