Mortgage rates hit 5%, highest in more than a decade
Source: Axios
The average rate on a 30-year mortgage hit 5% this week for the first time since 2011, according to widely cited data from Freddie Mac.
Why it matters: It's becoming increasingly expensive to buy a house if you can even find one. Over the past three months, mortgage rates have surged at a pace last seen in 1987.
At the same time, the home-buying frenzy driven by the pandemic has reduced the available supply of single-family houses. The number of home listings was at a record low last month, according to realtor.com data.
Open houses around the country with a line of folks waiting out the door are not uncommon.
Bottom line: It's going to be hard for first-time buyers to afford a house, but it'll likely be a while before the real estate madness moderates.
Read more: https://www.axios.com/mortgage-rates-highest-since-2011-430fc8ba-68ac-4e06-8ca6-2ba65c6ee3f8.html
This, along with the explosion of rent prices, are going to be the largest headwinds against us in November.
Johnny2X2X
(19,003 posts)Rates needed to rise. The real estate boom is still a supply issue, there aren't enough houses for sale.
Mosby
(16,295 posts)And price increases isn't just about supply, there are a lot of factors in play.
Auggie
(31,156 posts)plus other foreign and domestic investors/speculators and house-flippers ready with cash offers.
gldstwmn
(4,575 posts)I think the interest rate on my first mortgage was 7%. I remember in the late 70's early 80's when they were in the double digits.
brush
(53,759 posts)and other factors. There are still mortgage companies offering rates in the 3 and 4 percent range.
BumRushDaShow
(128,712 posts)back in 2003. They were able to grab a 5.25% mortgage rate at the time (a brief "bottom" before it went back up again) and were happy as clams (that was their 2nd house as they were selling the first and had good credit). Years later they refinanced when the interest rates dropped further.
We have been so used to the Fed's "0% interest" rates (to borrowing banks) for so long that it's assumed that anything more than 3% for a consumer is "high". If anything, the damn credit card rates in many states like here in PA, that have continually been set at what should be considered a usury rate of 25% (or more) for decades, should be what one should get up in arms about (but apparently that is controlled by the states and how they work their relationships with the issuers and the banks that manage them).
49jim
(560 posts)sell my house in 1980 because of a job promotion. Rates were 14-15%.....couldn't get any buyers. I finally sold it on a "Land Contract" and lost the home to tax sale because the "buyer" never kept up his end of the bargain. We were young and didn't have the money to cover the cost of two houses. Tough lesson to learn.