That’s how much more a typical homebuyer is signing up to pay each month now that rock-bottom mortgage rates are clearly behind us.
Not even counting the impact of relentlessly higher home prices, the recent emergence in average mortgage rates means a 30-year fixed mortgage for a home selling for $309,200 would now cost $1,293 a month, assuming a 20% down payment. Back in December 2020, when mortgage rates were almost 2 percentage points lower, the same loan would have cost $1,028.
The average 30-year mortgage rate has risen sharply in recent weeks, rising to 4.77% Thursday—its highest point since 2019—from as low as 2.89% in December 2020, according to lender data provided to The Balance.
The blame? In a sense, the out-of-control inflation we’ve all been experiencing lately. Mortgage rates tend to move in the same direction as 10-year Treasury yields, and inflation fears typically drive up those yields. It didn’t help that on Wednesday, the Federal Reserve began a campaign to raise its benchmark interest rate from virtually zero in an attempt to tamp down those rising consumer prices.
The $309,200 was the median US price back in December 2020, when our average 30-year mortgage rate was at its lowest for that year (and probably ever, based on other measures that go back further than our lender data.)
But if you take into account how much home prices have risen (to a median of $350,300 as of the latest data), the monthly payment now would be even higher: $1,465, or $437 more than in December 2020. (This doesn’t include property taxes, insurance, or other costs that typically need to be factored into a monthly housing payment.)
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