HOUSTON — The latest interest rate hike is expected to raise mortgage rates yet again. For homebuyers, things couldn't be worse.
Every week lately, mortgage rates have been creeping up and are now above 6%. It doesn't sound like a lot until you learn how much more you might have to pay every month.
If you're house hunting, you may need to look at a smaller house in case you haven't already locked in a mortgage rate.
A 30-year mortgage is now above 7% in some areas for the first time in 14 years. The difference is back then, homes were much cheaper. Now the average price of a home is around $400,000.
A new report from Time and Next Advisor warns to watch your monthly rate. A year ago, with mortgage rates at 3%, your monthly payment would have been $1,350 for that home. Now at 6%, you will pay $1,900 a month for the exact same house, which amounts to a 30% jump.
There's also the fact that home prices have not dropped, even though that usually happens when rates rise. The reason is that there's currently very little inventory and very few people selling homes on the market.
Your best bet may be an adjustable rate and hoping for lower rates within the next few years, so you don't waste your money.