It looks like mortgage rates are pushing the 6 percent mark, a significant milestone for the real estate industry.
After four consecutive weekly hikes, the benchmark 30-year fixed-rate loan is just under 6%, a psychologically significant level that hasn’t been breached in six months. Given the inflation-fighting talk coming out of Federal Reserve officials this week and the clear implication that the central bank will continue hiking interest rates, 6% mortgages might be at 7% sooner than most economists are predicting.
Mind you, 6% and even 7% mortgage rates are pretty darn good by historical standards. Our current housing boom, which started in 2000, began with the 30-year mortgage at 8% or so. But we have been treated to such low rates for such an extended period that even a historically low 7% feels high.
We’re now about one-half a percentage point above where we were this summer. On a $250,000 mortgage, that difference equates to about another $80 a month in principal and interest payments. That might not be enough to stifle homebuyers who can afford the $1,500 or so payment in the first place, but as rate increases pile up so will those extra dollars on the payment.
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