Surging mortgage rates make home buying more expensive in Detroit
Mortgage rates surpassed 5% — the highest it's been in more than a decade, according to data shared by Freddie Mac.
Why it matters: Low mortgage rates made buying in a sellers' market more affordable in the pandemic.
- Median home sale values in Detroit have cooled since summer 2022, and they were only up 5.5% year over year as of March 2022, but borrowing money is more expensive now.
State of play: A year ago, mortgage rates were at 2.97%. In late April 2022, mortgage rates were at 5.11%.
By the numbers: If you were to take out a $150,000 30-year mortgage loan in April 2021, your monthly principal and interest would be around $630, according to numbers shared by Freddie Mac.
- Your monthly payment on the same loan in April 2022 would be $815.
- That's $185 more per month, $2,220 a year and $66,600 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.
- We're still in a critical supply crunch, so even if home prices remain stead or cool, buyers will likely feel the squeeze of a tight market.
The latest: Metro Detroit's housing market remained robust in April despite rising interest rates, Crain's Detroit Business reports.
- Sales prices remain high and inventory is tight.
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