May 9, 2022 - News
Surging mortgage rates make homebuying more expensive for Columbus
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Illustration: Annelise Capossela/Axios
Mortgage rates have surpassed 5% — their highest in more than a decade, according to data shared by Freddie Mac.
Why it matters: Low mortgage rates made buying houses in a sellers' market more affordable in the pandemic.
- In March 2022, median home sale values in Columbus were up 13.7% year over year. Now, borrowing money is also more expensive.
- Already fatigued buyers could be priced out of the market.
By the numbers: A year ago, mortgage rates were at 2.97%. In late April 2022, they were at 5.11%.
- If you took out a $300,000 30-year mortgage loan in April 2021, your monthly principal and interest would be around $1,260, according to numbers shared by Freddie Mac.
- Your monthly payment on the same loan in April 2022 would be $1,631.
- That's $371 more per month; $4,452 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.
- If demand cools because of rising rates, housing prices could stabilize.
- But we're still in a supply crunch, so inventory would have to catch up to the remaining demand for prices to actually cool.