Mortgage rates top seven percent for first time since 2002 MABA Massachusetts FirstTimeHomeBuyers RealEstate

 A thirty year fixed-rate mortgage topped seven percent for the first time in more than twenty years this week, Freddie Mac reported, citing its Primary Mortgage Market Survey. Specifically, the rate jumped from six point ninety four percent last week to seven point eight percent this week. The last time the rate topped seven percent was April 2002. A year ago, the thirty year fixed was three point fourteen percent. “As inflation endures, consumers are seeing higher costs at every turn, causing further declines in consumer confidence this month,” Freddie Mac chief economist Sam Khater said in a press release. “In fact, many potential homebuyers are choosing to wait and see where the housing market will end up, pushing demand and home prices further downward.”

 National Association of REALTORS® senior economist and director of forecasting Nadia Evangelou said the macroeconomic circumstances surrounding this week’s increase were somewhat unusual, and cited the just-released third-quarter U.S. GDP figure, which came in at two point six percent, topping analysts’ expected two point three percent gain. “Generally, during inflationary periods, people hold less money and, thus, spend less,” Evangelou said in a press release. “However, that’s not currently the case. Amid elevated inflation and higher interest rates, the U.S. economy grew more than expected, easing inflation fears for the time being. As a result, mortgage rates surpassed the seven percent threshold this week.”

 Noting the impact rising mortgage rates have on homebuyer borrowing costs, which have increased monthly mortgage payments by one thousand dollars, Evangelou said minority groups could feel an even greater strain on their pocketbooks. “With seven percent mortgage rates, only fifteen percent of Black households can currently afford to buy the typical home, compared to thirty percent of White households,” she said. “Thus, Black families may fall further behind in homeownership compared to their White counterparts.” 

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