After last week's dip, mortgage interest rates for the 30-year fixed are back up to 7.18% from 7.12%. This marks the fifth consecutive week above 7%. For a buyer purchasing the typical single-family existing home at $412,300, the 30-year fixed would mean a monthly mortgage payment of $2,234.
Looking back, a year ago, rates were at 6.02% - the first time mortgage interest rates had crossed 6% since 2008. That would be a welcome relief to buyers today. A $400,000 home at a mortgage rate of 6.02% would translate to a monthly payment of $1,923 vs. $2,168 at 7.18%—a savings of $245. That savings could translate into money towards utilities, commuting, groceries, student loans, or childcare costs.
It is no wonder, then, when looking at NAR's Housing Affordability Index, the reading this last week was 87.8: the lowest point since July 1986 when the index was 87.7. The Fed needs to stop rate hikes as the impact on housing consumers is clear. Rate hikes have eroded housing affordability and wealth gains for potential buyers wanting to enter the market.