The 30-year fixed mortgage rate is now at the highest level since April 2020.
If you are in the market for a new home and have not locked in your mortgage rate, that home just got more expensive. According to Mortgage News Daily, the average rate on a 30-year mortgage hit 3.64% on January 17th. This is the 4th consecutive week that we have seen mortgage rates soar to their highest level since April 2020.
Mortgage rates increased significantly across all loan types in the first week of January as the Fed announced that it would offload mortgage-backed bonds from its balance sheet. The Fed had been buying those bonds aggressively during the pandemic in order to keep rates low, but it is now pulling out of the MBS market sooner than expected.
As of this posting, January 19, 2022, current rates in South Carolina are 3.82% for a 30-year fixed, and 3.00% for a 15-year fixed. Last week it was 3.62% for a 30-year fixed, and 2.90% for a 15-year fixed (source: smartasset.com).
The soaring mortgage rates are also reflected in this chart showing the 30-year fixed-rate mortgage averaged in the country since 2017.
This uptick in mortgage rates will cost a lot for home buyers. For a median-priced home, currently, about $287,480 in Greenville, SC, buyers putting down 20% will now see a monthly payment $100+ higher than they would have just one month ago. That may price some home buyers out of the market, especially first-time home buyers.
Mortgage rates have not been this high since the start of the pandemic in early 2020. The market saw a huge demand for housing due to the pandemic and historic low-interest rates. In 2021, rates moved within a narrow margin, but stayed relatively low, further fueling demand and rising home prices. Now, with rates soaring, potential homebuyers are nervous that their affordability window is closing faster than expected.
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