Mortgage Rates Continue Climbing, Adding Thousands in Costs for Homebuyers as Demand Plummets

Mortgage rates continued climbing last week, adding thousands in costs for homebuyers. 30-year fixed rates are around 7.63%, well above last year's 6.94% and the 2020 low of 3%.

The rise in rates came as the Federal Reserve raised rates aggressively to combat inflation. In just 16 months, the Fed approved 11 hikes - the fastest since the 1980s.

Higher rates affect borrowing costs for loans and credit cards. Just a small change can greatly impact monthly mortgage payments.

An 8% rate adds hundreds more in monthly costs versus 3.09% in 2021, potentially $400,000 over a 30-year loan.

High rates choked demand, with mortgage applications at a 27-year low. Limited supply also persists, with 45% fewer homes for sale than pre-pandemic.