That’s how much the typical monthly payment on a new mortgage increased in just one day as the average 30-year interest rate spiked by almost half a percentage point.
The average rate offered for a 30-year mortgage jumped to 5.87% from 5.41% overnight, according to lender data provided to The Balance, making a typical monthly payment about $1,690 rather than $1,607. That math assumes the homebuyer pays $357,300—the median price for a home in the U.S. in February, according to the National Association of Realtors—and puts 20% down. It does not include property taxes and insurance.
The huge spike, the biggest for any single day in at least the year The Balance has been collecting data, underscores how quickly things are changing in a residential real estate market shaped by record low mortgage rates only 15 months ago. 10-year Treasury yields, which mortgage rates typically follow, are surging as the Federal Reserve wages war on inflation, raising its benchmark interest rate and taking other measures to tamp down spending. Low borrowing costs had been one of the saving graces for homebuyers facing relentlessly higher prices amid a record-low numbers of homes for sale.
Indeed, lack of affordability was the main reason renters gave for not buying in a March survey by real estate company Redfin. Thirty-two percent said they couldn’t afford to buy a home where they wanted to live and 30% said they couldn’t swing a down payment. (Respondents were allowed to pick more than one answer.)
In a silver lining, experts say the higher mortgage rates may mean some price relief is on the horizon.
“Mortgage rates are rising fast, which is a double-edged sword,” said Daryl Fairweather, Redfin’s chief economist, in a report accompanying the survey results. “Higher rates mean higher monthly mortgage payments, but they will also eventually ease competition for homes, making it so fewer houses sell above their asking price.”
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