Rising mortgage rates are making it more expensive to buy a home in Washington

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Image: Annelise Capossela/Axios

Mortgage rates topped 5% – the highest in years, according to data from Freddie Mac.

Why it matters: Low mortgage rates made buying in a seller’s market more affordable during the pandemic.

  • In March 2022, average home sales values ​​in DC rose 9.4% year over year, and now it’s more expensive to borrow money.
  • Already overtired buyers could be pushed out of the market.
Data: Freddie Mac, Redfin.  Diagram: Simran Parwani/Axios
Data: Freddie Mac, Redfin. Diagram: Simran Parwani/Axios

Game Status: A year ago, mortgage rates were 2.97%. They were at 5.11% at the end of last month.

If you took out $500,000 For an April 2021 30-year mortgage loan, your monthly principal and monthly interest would be about $2,100, according to Freddie Mac.

  • Your monthly payment on a $500,000 30-year loan in April 2022 (at 5.11%) would be $2,718.
  • That’s $618 more per month; $7,416 per year; and $222,480 more over the life of your loan.

What’s next: Mortgage rates are expected to rise throughout the year, averaging 4.6% for 2022 and 5% for 2023, according to Freddie Mac’s trend forecast.

  • If demand cools due to rising interest rates, property prices could stabilize.
  • We are still in a critical supply crunch, so inventory would need to catch up with the remaining demand for prices to actually cool.

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