Surging mortgage rates make homebuying in NWA more expensive
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.
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.
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