Your borrowing costs just keep going up!
Attention Boston condo buyers mortgage rates have risen again for the fourth successive week, and have now jumped more than 90 basis points in the last month.
Rates have jumped from 3.76% to 4.67% in just March alone, significantly increasing the borrowing costs for buyers, Nadia Evangelou, senior economist and director of forecasting at the National Association of Realtors, wrote for the association’s blog.
The monthly payment for a median-priced home with a 30-year fixed-rate mortgage rose more than $170 in March due to higher rates, Evangelou notes.
In the past three months, that amount has been increasing even more. For example, LendingTree offers the following example: A 30-year, fixed-rate mortgage loan worth $300,000 would have cost a buyer about $1,283 a month with the average rate on Dec. 30, 2021, of 3.11%. But at the current average rate of 4.67%, that monthly cost has jumped to $1,551—an increase of $268 a month, $3,216 a year, and $96,480 over the lifetime of the loan.
Still, even with the latest jump in mortgage rates, borrowing costs do remain low by historical standards. From 2002 up until 2009, rates generally were between 5% and 6.5%, LendingTree noted.
Boston Condo Prices and Mortgage Rates Projected to Continue to Rise
However, Boston condo buyers are facing higher asking prices for homes, and rates are projected to continue inching up.
“Mortgage rates continued moving upward in the face of rapidly rising inflation as well as the prospect of strong demand for goods and ongoing supply disruptions,” said Sam Khater, Freddie Mac’s chief economist. “Purchase demand has weakened modestly but has continued to outpace expectations. This is largely due to unmet demand from first-time homebuyers as well as a select few who had been waiting for rates to hit a cyclical low.”
From the Mortgage Matters blog, by Holden Lewis, at bankrate.com:
I hope you weren’t floating your mortgage rate this week. Tuesday and today have been brutal on mortgage rates because of the economic news. Consumer confidence is up when investors had expected it to go down. Used-home sales in March rose when investors had expected them to drop. And new-home sales went up by more than 10 percent last month, when investors had expected them to rise just a little bit.
As a consequence, Treasury yields have risen sharply in the last couple of days. Mortgage rates are rising with them. The yield on the 10-year Treasury is 5.09 percent this morning, up from 4.99 percent Monday. In today’s Bankrate survey of mortgage rates, the 30-year probably will rise 6 or 7 basis points from last week’s 6.57 percent. That will give us the highest rates since June 2002.
The Perfect Storm. Higher interest rates and higher home prices.
I hate it!
Source: Mortgage Matters – By Holden Lewis, bankrate.com
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Updated: January 2018