In a moment when mortgage rates are rising, experts predict that interest rates would not be too far behind. Higher interest rates will make it more difficult for buyers to qualify for mortgage.
Some say that this year, there is a good possibility interest rates to reach 5 % for standard 30-year fixed-rate mortgages.
In the second week of April, the average mortgage rate was 4.34 %, according to the Freddie Mac’s weekly survey.
In comparison, the rates this March have gone up by 0.77% from the same time last year.
The reality check shows that even if the interest rate rises one percentage point during the course of a 30-year mortgage, this would mean that borrowers would have to shed tens of thousands of dollars.
But then again, the rise of interest rate is only one of the factors that affects housing affordability. The slow income growth, the still relatively high unemployment and higher median home prices are among the other real obstacles standing in a way of potential homeowners.
Read the full story at The Durango Herald.