Homebuyers in the United States are being crushed by the rapid increase in rates for mortgage loans. With the Federal Reserve aiming to combat inflation with rate increases, borrowing costs for mortgages have been steadily ticking upwards and this is only magnified for homebuyers that are struggling with additional financial burdens. Over the past few months, the national average 30-year fixed mortgage rate has increased to nearly 6%, which is up from just 3.79% in January. The high rate could make mortgages more expensive for new homebuyers this year.
A recent report, published by the LendingTree loan platform, reviewed data from home sales and mortgage rates to quantify the effects of rising mortgage rates on the housing market. This data was then compiled and analyzed, with experts evaluating potential outcomes for homebuyers in a variety of financial situations.
In the state of Florida, average interest rates on mortgages rose from 3.76% to 5.25% between January and April, which is a startling 17% increase in only four months. The reason behind this massive jump in APR is largely unknown, but some reports have indicated that it could be due to the recent increase in interest rates by The Federal Reserve.
When taking into account both average home values and the mortgage rates in Florida, the average Florida homebuyer will pay $3,213 more in interest on their mortgage in the first year. This figure will rise to $96,397 over the lifetime of a 30-year-fixed mortgage with a 20% down payment. This is the 18th largest percentage increase among U.S. states
The high rate could make mortgages more expensive for new buyers this year, but it also reflects a healthy and strong economy and could spur some potential buyers to purchase before rates increase any higher.
