flexiblefullpage - default
Currently Reading

Mortgage Rates Will Likely Keep Rising, but Just How High Will They Go?

Advertisement
billboard - default
Affordability

Mortgage Rates Will Likely Keep Rising, but Just How High Will They Go?

Economists are gritting their teeth and bracing for higher mortgage rates ahead, but when will the increases end?


April 14, 2022
Rising housing costs graphic
Image: Stock.adobe.com

Current 30-year fixed mortgage rates are at 5.12%, and they may continue to rise closer to 6%, says Bill McBride in the CalculatedRisk Newsletter, but despite recent gains, rates are still historically low. The Fed Funds rate is expected to rise to roughly 3.25%, and at its peak, the yield curve will flatten and the 10-year treasury rate will likely match the Fed Funds rate. 

Higher mortgage rates are wiping out housing affordability across the nation in an already record-breaking market, and with more increases to come, creating more affordable housing will remain a top priority for the months and years ahead.

Higher rates will impact affordability. Based on today’s mortgage rates, affordability has declined to levels not seen since the housing bust).

However, it is important to understand that if mortgage rates double - say from 2.5% to 5.0%, monthly payments do not double. For this example, principal and interest payments would increase about 35%, and if you include taxes and insurance (PITI), payments will increase about 25%. This is a huge increase, but payments do not double when mortgage rates double.

Read more

Advertisement
leaderboard2 - default

Related Stories

Affordability

The Disappearing Act That Is Middle-Income Housing

An expert weighs in on the diminishing supply of middle-income housing, which is particularly acute in California, and what to do about it

Off-Site Construction

Utah Passes Bill to Regulate Modular Construction at the State Level

Goals for housing innovation and affordability meet in the Utah's passage of a new bill that establishes a statewide modular construction program

Affordability

Affordability Improves, but the Average Worker Still Struggles to Afford a Home

Homeownership around the U.S. continues to require historically large portions of worker wages, a new housing-affordability report finds

Advertisement
boombox1 -
Advertisement
native1 - default
halfpage2 -

More in Category

Delaware-based Schell Brothers, our 2023 Builder of the Year, brings a refreshing approach to delivering homes and measuring success with an overriding mission of happiness

NAHB Chairman's Message: In a challenging business environment for home builders, and with higher housing costs for families, the National Association of Home Builders is working to help home builders better meet the nation's housing needs

Sure there are challenges, but overall, Pro Builder's annual Housing Forecast Survey finds home builders are optimistic about the coming year

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.