May 31, 2022 - Business

Surging mortgage rates make homebuying in NWA more expensive

Illustration of a house's roof being taken off by a trend line soaring upward through the home

Illustration: Annelise Capossela/Axios

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.

  • In March 2022, median home sale values in the Fayetteville metro area were up nearly 30% year over year, and now borrowing money is more expensive, too.
  • Already-fatigued buyers could be priced out of the market.
Data: Freddie Mac, Redfin; Chart: Simran Parwani/Axios

State of play: A year ago, mortgage rates were at 2.97%. In late April 2022, mortgage rates were at 5.11%.

If you were to take 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 $300,000, 30-year loan in April 2022 (at 5.11%) 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 rise at a slower rate.
  • We're still in a critical supply crunch, so inventory would have to catch up to the remaining demand for prices to actually cool.

Get more local stories in your inbox with Axios Raleigh.


Support local journalism by becoming a member.

Learn more

More Raleigh stories

No stories could be found


Get a free daily digest of the most important news in your backyard with Axios Raleigh.


Support local journalism by becoming a member.

Learn more