The one-two punch of higher mortgage rates and escalating home prices reduced homebuyers’ ability to buy homes in February. The trend is also likely to worsen in the coming months.
The national median monthly mortgage payment settled in loan applications increased 8.3%, from $1,526 in January to $1,653 in February, according to a survey published Thursday by the Mortgage Bankers Association. Compared to February 2021, payments jumped 25.6%.
Conventional loans’ national median mortgage payment went from $1,582 in January to $1,749 in February. Meanwhile, FHA loans increased from $1,142 to $1,201 in the same period.
“Low unemployment has spurred strong income growth in early 2022, but homebuyer affordability has decreased due to the quick rise in mortgage rates amidst steep home-price growth,” said Edward Seiler, MBA’s associate vice president for housing economics and executive director at the Research Institute for Housing America, in a statement.
Loan officers on Thursday told HousingWire that rate locks on 30-year fixed-rate mortgages were coming in around 4.75%, about 30 basis points higher than what Freddie Mac’s weekly PMMS report found.
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