It is official! Mortgage Rates are UP. As of January 18th, mortgage rates have climbed again. Here are the highlights:
- The 30-year fixed mortgage rate is now at the highest level since April 2020.
- Rates are closing in on a full percentage point gain from a year ago.
- “Some [lenders] will be at 3.625%, but many are already up to 3.75%,” said Matthew Graham, COO of Mortgage News Daily.*
So, how will this affect the housing market? All along projections are that housing prices will remain high. However, more recently we are seeing other opinions. The latest from fortune.com announces this spike is the highest in 9 years and this should slow down home price growth.
Mortgage rates are UP enough to cause a shake up
Furthermore, this latest hike has potentially enough punch to really shake up the housing market. When you look at the following example you can see why.
“A borrower who takes out a $400,000 mortgage at a 30-year fixed rate of 3.11% would owe a $1,710 monthly payment; at a 3.64% rate, that payment jumps to $1,827—or an additional $42,244 over three decades.”
Where do we go from here?
As we all know, no one has a crystal ball reading what is to come in 2022. However, here is the takeaway from the experts. On one hand, rates rise to 4% we will experience a notable downshift in demand. On the other hand, if the rates rise slowly throughout the year, sellers can adjust their prices accordingly easing the disruption to housing market.
The Dias Team is Here to Help
Regardless of the uncertainties in the housing market, we are here to help answer any questions you have. As expert agents, we bring a wealth of knowledge and expertise about buying and selling real estate in these areas. It is not the same everywhere, so you need someone you can trust for up-to-date information. We are eager to serve you. Learn more about us to find some of the things we can do for you.
Also, we haven’t forgotten to add more listing under 275K as we promised in our last blog. Click here to find listings below 275K. This time the listings are in Warren, East Providence and North Providence. Happy Hunting! And when you are ready, give us a call.
Joe Dias III, owner
Phone: (401) 639-3163