The Federal Reserve is meeting this week and is expected to announce an increase in interest rates for the third time this year, all in an effort to help curb sky-rocking inflation.
Monday the markets are reacting drastically, including the mortgage market where interest rates have more than doubled in less than 6 months.
“It’s the most movement I’ve seen in my career without question,” Plains Commerce Bank Senior Mortage Banker Kevin Carlson said.
In January, home buyers were seeing mortgage rates below three percent.
“Now they’re flirting with 6 percent, which we have not seen in over a decade,” Carlson said.
When you crunch the numbers…
“So $350,000 on a 30-year term at six percent is a monthly payment of $2098 versus at three percent its
“$1,476, so a difference of $622 dollars a month,” Carlson said.
Home buyers are now stuck with a much higher monthly payment, for the same house.
“That’s a 42 percent increase in mortgage payments,” Carlson said of the $350,000 home purchase example.
“Things are shifting a little bit, so it’s going to be really critical that buyers are staying in communication with their lenders,” RASE president Anne Ferrell said.
The Realtor Association of the Sioux Empire says this volatile mortgage market makes it crucial for buyers to constantly re-evaluate just how much house than can afford at the current rate.