JACKSONVILLE, Fla. – For the first time in more than a decade, home mortgage rates have risen above 5% and with the highest inflation in 40 years, the goal of home ownership is more expensive than ever.
News4JAX shows you how this recent rate hike is affecting monthly mortgage payments.
Americans who didn’t buy a home during the COVID-19 pandemic may be suffering from sticker shock as they seek financing today.
This latest hike comes on the heels of the Federal Reserve’s announcement last week of plans to raise interest rates more quickly — as a way to fight inflation on everything from groceries to cars to gasoline.
News4JAX pulled the numbers on a $250,000 home loan, excluding taxes, insurance and fees, and found that a year ago today, the average 30-year fixed rate was 3.04% — equivalent to a monthly mortgage payment of $1,059 . That same $250,000 home loan at today’s 5% interest rate equates to a $1,342 payment. That’s an extra $283 a month, which is an extra $3,386 a year.
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Economists say the rate hike could boost home sales in the coming weeks as home-seekers scramble to buy one amid fears that mortgage rates could rise again.
Federal officials are hoping higher interest rates will help lower inflation while housing remains tight.
In March, Jacksonville home prices rose 25.5% year over year and sold for an average price of $295,000, according to Redfin.
It remains unclear whether the Fed will raise interest rates again.
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