Average closing costs for a single-family home rose 13.4% in 2021.
House hunters are getting a wake-up call that their budgets won’t go as far this spring.
“While springtime is typically the busiest homebuying season, the upswing in rates has caused some volatility in demand,” says a Freddie Mac official.
A “lock-in” effect from ultra-low mortgage rates over recent years may prevent some homeowners from moving on.
Expect some easing in sales, though prices will continue to inch higher.
Since the start of the year, about $400 has been added to the average monthly mortgage payment on a median-priced home.
Inflation is at a 40-year high and higher spending on other consumer items may mean less money to spend on a mortgage payment.
Borrowing costs are quickly rising, and buyers want to lock them in ahead of further hikes.
The 30-year fixed-rate mortgage has seen the fastest three-month increase in 28 years.
The higher rates may arrive sooner than housing analysts originally predicted.
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