Rates are still relatively low by historic standards, but when combined with soaring sale prices, higher borrowing costs are increasingly discouraging homebuyers, polling shows. (The Balance’s daily data only goes back to April 2021 and the yearly highs and lows only as far back as 2020, but we do know the highest the 30-year average got in 2020 was 4.71% in March, while the lowest it went was 2.89% in December.) “Frankly, I’ve been surprised at how quickly they’ve risen just in the last couple of weeks,” said Jeff Tucker, a senior economist at real estate company Zillow. “Home prices rose by a record amount in 2021, and to follow that up with rapidly rising mortgage rates takes the affordability for first-time homebuyers from bad to worse.” Indeed, the math looks significantly different than it did just a year ago. Between prices and borrowing costs, the monthly mortgage payment on a typical house has risen by about $243 over the last year, according to Zillow home price data. In fact, since rates are expected to keep rising, Tucker said, those who want to buy a home should consider moving quickly. Homeowners can always refinance if rates fall back down, he said. Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com.
