Rising mortgage rates may be slowing down the booming housing market across the country.
Last week, the average 30-year fixed mortgage rate topped 4.67%—up from 3.11% in December. That’s a bigger deal than it might appear. If a borrower took out a $400,000 mortgage at 3.11%, they would owe $1,710 per month over the 30-year loan. At a 4.67% mortgage rate, that monthly payment spikes to $2,067.
Higher mortgage rates could price out some would-be homebuyers, it also means some borrowers may lose their mortgage eligibility. This rise in mortgage rates has some in the real estate industry predicting that the red-hot housing market will finally lose some steam according to real estate data firm CoreLogic. On Monday, the real estate research firm, said that home price growth is about to decelerate—substantially. At its latest reading, U.S. home prices shot up 19.2% between January 2021 and January 2022. But over the coming 12 months, CoreLogic says, home prices will rise just 5%.