Interest Rates Hurt Home Buyers
People who had planned to buy a home instead of renting are facing a sharp increase in how much that home could cost them after mortgage rates spiked sharply this week, further slowing down the U.S. Housing market. When added to the higher costs for food and transportation, a 30 year mortgage will now cost consumers much more than before as the Federal Reserve contemplates another increase in interest rates.
The average fixed mortgage jumped yesterday from 5 and a half percent to more than 6 and a quarter percent.
The Fed uses higher interest rates to stop people from buying things on credit, but that only adds to the problem people are having who can’t afford basic needs because of those higher prices.