Mortgage rates have risen since the start of 2022. And it is not slowing down anytime soon.
This week, Freddie Mac came out and said that the average 30-year fixed-rate mortgage is at a 5.20%. Below is a look at what the average 30-year fixed-rate was at the start of 2022 and the difference a few short months have made on buying power.
In January of 2022, the average 30-year fixed-rate was at 3.11%.
The average home price in Orange County, CA is $970,000. We will use that as our basis and figuring a 20% down payment.
On a loan of $776,000 back in January with an interest rate at 3.11% you were looking at a principal and interest payment of $3,318.
Moving forward to today with the same loan and a rate of 5.20% you are looking at a principal and interest payment of $4,261.
That is $943 difference in monthly mortgage mortgage payments. $11,316 difference in just one year of owning that home.
This is causing many potential home buyers to pull the plug on looking for a home today.
On the flip side, home prices continue to go up with no end in sight. Within the March Existing Home Sales data it showed that the median existing house price rose 15% from a year earlier to an all-time record high of $375,000.
Just to give you an example, a friend of ours bought a home in Ladera Ranch in August of 2021 for $1.35M. Just last week, a home in their neighborhood with the exact floor plan sold for $1.68M. That’s an over $300,000 gain in 8 months.
Like we always say, get in the game any way you can and stick with it. It will pay off and help you on your road to financial freedom.