Rising interest rates continue to dump ice-cold water on what has been for several years an absolutely white-hot housing market:
Mortgage rates jumped to their highest level in more than two decades, making home-ownership even less affordable for many would-be buyers.
The average interest rate on a 30-year, fixed-rate home loan climbed to 7.09% this week, according to mortgage giant Freddie Mac. That's the highest it's been since April 2002 and comes after the Federal Reserve has raised interest rates aggressively in a bid to fight inflation.
It can't really be overstated how much the huge surge in interest rates has driven up the cost of owning a home: Whereas in, say, 2021 a homeowner would've paid a little more than $1,100 per month on a $350,000 home, today he's paying more than $1,800.
Buying older homes won't save buyers, either.
Of course, the massive surge in monthly costs is only one side of the coin. Inflated interest rates also mean that homeowners who are presently locked into a 3% interest rate have increasingly little interest in selling their current homes and buying at the higher rates.
(Can you blame them?!)
That means housing stock is significantly lower than what it was just a few years ago — a factor that's driving up prices even further.
Sales in June of this year were nearly 20% lower than they were a year ago.
The Federal Reserve, meanwhile, is likely to raise interest rates once again in the near future.
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