- Advertisement -

The average 30-year fixed mortgage rate topped 6% this week for the first time since the end of 2008, and the latest data shows the staggering impact of the combination of rising rates and rising house prices on home affordability.

- Advertisement -

After Freddie Mac reported on Thursday that the benchmark 30-year bond now has an average rate of 6.02%, Realtor.com economic research manager George Ratiu analyzed the numbers and found that the median mortgage payment is now 2,100 dollars, which is 66% more than in comparison with the previous year. just a year ago.

- Advertisement -

Using Realtor.com’s latest August list price of $435,000 and assuming a down payment of 20%, Ratiu calculated today’s mortgage rate and found a stunning increase in payments from when rates were still lower last year. 3%.

REAL ESTATE PRICES “COOL” BUT “DO NOT SELL”: EXPERT

The average payment of $2,100 does not even include additional housing costs such as homeowners association fees and property taxes.

Ratiu called the increase “significant”, telling FOX Business that it shows “the incredible impact that interest rates, especially mortgage rates, have had on a buyer’s ability to finance a home right now.”

house sales

Not only have interest rates more than doubled over the past year, home prices have also remained high due to low inventories. Ratiu said that even with a significant slowdown in the market and lower asking prices by some sellers, home prices still rose by about 14% compared to last year.

INFLATION HIT THE RENTAL MARKET AS INCREASING MORTGAGE RATES, LIMITED OFFER RAISE PRICES: REAL ESTATE EXPERT

These factors put pressure on the housing market and force more and more buyers to abandon it.

A slew of new economic data released earlier this month shows the sector is starting to slow down significantly, with homebuilders-to-industry ratios falling to the lowest level in two years, buyers exiting the market as they cancel home sales at the fastest pace. since 2020, and mortgage applications for purchases continue to decline.

home sale mortgage

“Basically,” says Ratiu, “the American homebuyer’s response is pretty loud and clear, namely, ‘We’re out of the loop.

CLICK HERE CLICK FOX BUSINESS ON THE ROAD

He added: “I think these rates absolutely limit the ability of many Americans to afford a home, and I think this is especially difficult for first-time homebuyers.”

Megan Henny of FOX Business contributed to this report.