flexiblefullpage - default
Currently Reading

Monthly Mortgage Payments Soar to New Record High

Advertisement
billboard - default
Financing

Monthly Mortgage Payments Soar to New Record High

Mortgage rates are up to a 20-year high as the Fed tightens its monetary policy in a tactical market correction meant to slow runaway inflation 


October 17, 2022
Red arrow rising through roofs of purple homes next to stack of coins
Image: Stock.adobe.com

The average 30-year mortgage rate hit 6.7% for zero points and top tier scenarios on Friday, the highest rate in 20 years, according to Bill McBride in the CalculatedRisk Newsletter. Principal and Interest payments (P&I) are up 59% year-over-year for a fixed amount, well above the previous record increase of 50% in 1980, and the most recent P&I measurement doesn’t take into account rising house prices. 

As interest rates continue to rise, home sales are slowing across the U.S., but builders can expect a rebound in buyer demand as a slowdown pushes the housing market back to an equilibrium after a two-year push and pull between buyers and sellers. 

In the 1980 period, new home sales fell about 40% YoY and about 60% from the peak in the 1970s to the trough in 1980. A similar decline might push new home sales down to around 400 thousand SAAR in coming months. 

Even though we can expect significant further declines in new home sales and single-family housing starts, the good news for the homebuilders is activity usually picks up quickly following an interest rate induced slowdown (as opposed to following the housing bust when the recovery took many years).

Read more

Related Stories

Economics

Mortgage Rates Are Falling—Does That Mean the Housing Market Is Weakening?

As inflation shows signs of cooling, mortgage rates are falling, but experts say it may be too soon to call it a recession

Housing Markets

Could These Midwestern Metros Be the Next Top Real Estate Markets?

Out-of-state homebuyers are flocking to Midwestern markets like Lafayette, Ind., and Topeka, Kan., where they're finding affordable homes, high-paying jobs, and robust local economies

Financing

Are Slower Rate Hikes Enough to Bring Buyers Back to the For-Sale Market?

Homebuyer demand rebounded slightly after a small dip in the 30-year fixed-rate mortgage, but an inflated economy continues to pose affordability challenges even in a cooling market

Advertisement
boombox1 -
Advertisement
native1 - default
halfpage2 -

More in Category




Advertisement
native2 - default
Advertisement
halfpage1 -

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.