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Mortgage: Interest on mortgages rises 5%, what does this mean?

The housing market has continued to become more volatile over time, creating mortgage rates that are higher than ever.

family holding a home they would need to pay a mortgage on

The recent increase in interest rates across the board have made mortgage rates higher.

Inflation levels this high haven’t been seen in almost 50 years.

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The solution to this from the Federal Reserve was to raise interest rates for the first time in two years.

The goal is to help diminish inflation, but the process is slow moving and may not be noticed for another year.

Those looking to purchase homes are already feeling the pressure from the Federal Reserve’s decision.

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How those purchasing homes are feeling the interest rates in their mortgage

In recent weeks interest rates jumped from 2.67% to 5.08%.

This means the average price for a home in the U.S. went from $309,200 to $357,300 in just over one year.

The overall jump for families trying to buy homes is around 55%.

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Families need to put around 10% down for a down payment, and the new average monthly mortgage payment is around $1,742.

That’s up from $1,124 from before the hike in interest rates.

This means around $700 was added to monthly payments.

As homes become unaffordable, they’re also sitting empty because nobody can afford to move into them the way they used to.

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