The average U.S. fixed rate for the 30-year mortgage rose to 3.56% this week, hitting the highest level since March 2020, and surging inflation at the start of 2022 threatens to push rates even higher, Insider reports. As mortgage rates rise, housing affordability is limited, though buyers are still putting up a strong fight.
High demand is driving tight market competition across the nation, and first-time buyers are having a hard time keeping up, particularly as mortgage rates rise and all-cash and non-primary residence buyers flood regional markets. According to some experts, the 2022 market could be one of the worst on record for first-time buyers.
"A gradual uptick in mortgage rates will make affordability a top consideration for home buyers, especially the 45 million millennials aged 26 to 35 who are at prime first-time home buyer age," Danielle Hale, Realtor.com chief economist told Insider.
Although millennials are approaching their peak home buying years, Zillow claims that young buyers now make up a "smaller share of the market than in previous years." The company's data shows Boomers are eclipsing the generation in sales, suggesting first time home shoppers are "being crowded out by demand from repeat buyers."
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