Mortgage Rates Rose Even Higher. Here’s How Much More You’d Pay Now.

Text size

Mortgage rates climbed past 4% last week—and their rapid rise didn’t stop there.

The average rate on a 30-year fixed mortgage rose to 4.42% this week, its highest level since January 2019, according to Freddie Mac’s Primary Mortgage Market Survey. The increase was more than one-quarter of a percentage point higher than last week’s rate of 4.16% and 1.25 percentage points higher than the same week last year.

Mortgage rates have been quickly gaining this year, driven higher by inflation, the Federal Reserve, and geopolitical uncertainty, said Freddie Mac chief economist Sam Khater. That’s adding to concerns about affordability.

“The rise in mortgage rates, combined with continued house price appreciation, is increasing monthly mortgage payments and quickly affecting home buyers’ ability to keep up with the market,” Khater said.

After falling to historic lows last year, rates have gained significantly in 2022, adding to the price of homeownership. The primary and interest payment, which makes up a substantial share of a monthly mortgage payment, on a $300,000 house is $1,205 using this week’s rate and assuming a 20% down payment, according to a Realtor.com mortgage calculator. (Both Barron’s and Realtor.com are owned by News Corp.) That’s $179 more than what someone would’ve paid at the end of 2021 and an increase of $238 from mortgage rates all-time low of 2.65% in early 2021.

Home buyers have contended with swiftly rising home prices, and the current rise in rates has likely sent some buyers to the sidelines. The National Association of Home Builders attributed February’s month-over-month drop in new-home sales in part to rising mortgage rates.

Rates may not be finished rising, either. Robert Dietz, the builders association’s chief economist, said he expects interest rates to continue to rise, further pressuring home affordability, as the Federal Reserve raises interest rates and scales back its purchases of mortgage-backed securities to fight inflation.

Many industry forecasts call for the average rate on a 30-year fixed mortgage ending the year above 4%, with the National Association of Realtors forecasting a fourth-quarter average rate of 4.3%, and the Mortgage Bankers Association foreseeing an increase to 4.5%. 

Write to Shaina Mishkin at [email protected]