Housing market reeling from rate hike
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National mortgage rates have surpassed 5% — making them the highest in more than a decade, Axios' Brianna Crane reports.
Why it matters: Low rates made buying in a seller's market more affordable during the pandemic.
- While median home sale values in Chicago have remained relatively steady in the last few years, up just 3.4% year over year as of March, borrowing money is more expensive now.
State of play: Mortgage rates rose from 2.97% last April to 5.11% this April, according to data from Freddie Mac.
What they're saying: "The increased rates have eliminated some buyers from the market but have also motivated others to find a home after being outbid on numerous other properties," Homeside Financial VP of lending David Hochberg tells Axios.
- "The outlook right now for buying in Chicago this spring is fluid, with more buyers than sellers and refinancing of mortgages down over 70%."
By the numbers: If you had taken out a $300,000 30-year mortgage loan in April 2021, your monthly principal and interest would be around $1,260, according to Freddie Mac data.
- Your monthly payment on the same loan in April 2022 would be $1,631.
- That's $371 more per month, $4,452 more a year and $133,560 more over the life of your loan.
What's next: Mortgage rates are expected to rise throughout the year, averaging 4.6% for 2022 and 5% for 2023, according to Freddie Mac's trend forecast.
