Increase in mortgage credit rates increases the monthly payment for its liquidation by 1,000 dollars

The mortgage market of USA it is experiencing a significant shock due to the inflationary panorama and the decisions of the Federal Reserve (FED) to control the rise in prices. In this context, at the end of 2022 the average rate for this type of loan was close to 7%, that is, higher than at the beginning of that year when it stood at 3 percent.

According to the National Association of Home Builders (NAHB), this increase in average mortgage rate In the United States, it has caused the monthly payment to settle this type of financing to increase by around 1,000 dollars, which affects the people who have contracted the loan during that period and therefore, the housing affordability in that nation.

“The difference between a mortgage rate of just over 3% and a mortgage rate of 7% adds approximately an additional $1,000 mortgage payment to a living place typical new mid-priced single-family home and puts 18 million American homes off the market,” an NAHB analysis read.

According to Na Zhao, an economist at the NAHB, in a one-year period, average monthly mortgage payments went from $1,925 to $2,923 over the course of 2022, an increase of 51 percent.

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According to Zhao, when US mortgage rates reached their highest point of that year, of 7.08% at the end of October 2022, only 20.3% of families in that nation qualified to access a loan of this nature, which excluded 18 million households.

“The monthly mortgage payment increased to $2,923, which requires a household income of at least $147,071 to qualify for a mortgage on the same house,” Zhao said.

These increases impact most of the new purchasers of this type of financing, which, due to the increase in rates, have to adjust their budgets for the monthly payment throughout the life of the loan. credit.

It should be noted that, according to statistics, about 90% of the mortgage credits in USA They have been granted at a fixed rate, while 10% are in the variable rate modality.

rate would drop

Last December, inflation in USA it registered an annual increase of 6.45%, that is, a slowdown compared to its highest peak last year, which was in June 2022 when it registered an increase of 9.1 percent.

For Lorenzo Yun, chief economist for the National Association of Realtors in USA (NAR), the average rate of mortgage credit in that country it could be below 6%, when in its last measurement, on January 12, it stood at 6.33 percent.

“The drop in the 30-year mortgage rate below 6% is now a distinct possibility. The door is beginning to open for home buyers they were excluded in October and November when rates exceeded 7 percent. However, there is still housing shortage and there are not enough listings,” Yun said.