x
Breaking News
More () »

Interest-rate hike sends mortgage rates into 14-year high

The 30-year mortgage rate is now 6.29% last year this time it was at 2.86%

HOUSTON COUNTY, Ga. — For the first time in 14 years, average long-term U.S. mortgage rates jumped by more than a quarter-point. 

After the federal reserve raised interest rates a fifth time, the 30-year rate climbed to 6.29% this week, but could the effort to cool inflation freeze a white hot real estate market?

The COVID-19 pandemic catapulted the real estate market into un-charted territory.

"We were seeing multiple offers, sometimes 20 offers on one property going way over asking with a guaranteed cash at close for the appraisal gap," Houston County realtor Beth Lynn said. 

As the market seems to be slowing, realtors like Beth Lynn are navigating something different. 

"I think the biggest we're seeing is not as much growth or as fast a growth as we have seen and were seeing longer days on the market, but we are not seeing a price increase in houses that are probably under $300,000," she said. 

Lynn has been a realtor through the 2008 recession, a pandemic, and now the highest mortgage rate in 14 years. 

"Last week the interest were in the upper fives like 5.6%,5.7%, this week they're in the upper sixes and we are projecting them to be 7 or greater by the end of the year,” Lynn said.

As the federal reserve aims to cool inflation, that means debt costs for Americans will rise. 

The 30-year mortgage rate is now 6.29% last year, and this time it was at 2.86%.

"If you're wanting a $200,000 house and your interest rate is 6.6%, over the course of 30 years that payment is going to be about $1250 a month," she explained. 

Though the rates are rising, central Georgia real estate is still in high demand.

Lynn gives this advice to potential buyers:

"Buy the house and date the rate. Interest rates go up and down and you'll have the opportunity over the lifetime of owning your home to refinance at a lower rate. If you want a house you need to buy it, now,” she said. 

Mortgage rates don't necessarily mirror the fed's rate increases, but tend to track the yield on the 10-year treasury note.  

Lynn says here in central Georgia, she doesn't see prices dropping in the area because the demand is so high. 

WHAT OTHER PEOPLE ARE READING:

RELATED: 'It's helpful:' I-16, I-75 electric charging stations coming soon to Georgia

RELATED: Payments roll out for Georgians in certain social benefit programs

Paid Advertisement

Before You Leave, Check This Out