According to a MoneyTransfers.com analysis, the 30-year fixed-rate mortgage (FRM) leaped to 5.27% on May 5, 2022, a 13-year high. Contrastingly, the FRM was 2.96% a year back. Similarly, the 15-year FRM averaged 4.52%, up from 2.30% a year ago.
“Americans are having to dig deep into their pockets for home purchases,” says MoneyTransfers CEO Jonathan Merry. He adds, “Larger monthly payments threaten to price out buyers that can’t put down significant down payments. That’s happening in the backdrop of escalating rent nationally exacerbating the difficulty of first time home ownership.”
That sharp rise in the mortgage rates also coincides with the shooting up of median house sale prices. The figure had stood at $423,600 at the close of Q4, 2021. But it rose by 1.44% in Q11 2022 to stand at $429,700, an all-time high. At the time, America was grappling with an 11.5% inflation.
Enthusiasm for home ownership hasn’t waned
Despite the upswing in prices, demand for housing units outstrips the supply. Consequently, customers are outbidding each other for homes raising their costs.
Housing prices shot up the roof at the onset of the COVID-19 pandemic. Market statistics put that upswing at 32-39% higher than the pre-pandemic rates. The scourge’s mitigation measures saw growth in remote working hence a surge in need to relocate.
