Commentary
In February, we
wrote in The Epoch Times that rising inflation and the ensuing increase in mortgage rates would reduce the value of American homes. We
spoke to real estate experts on the topic as well and encouraged homeowners who wanted to sell to move quickly. We’re now seeing transaction volume dwindle as fewer deals are taking place. There are several reasons for this.
Housing Becoming Less Affordable
Depending on the details of a transaction, a traditional 30-year mortgage currently carries an interest rate of around 5.3 percent. While historically, mortgage rates in the 5 percent to 6 percent range were considered attractive, after almost a dozen years of the U.S. Federal Reserve keeping the Fed Funds Rate at or around zero, people have gotten used to ultra-low mortgage rates. The 5.3 percent rate we’re seeing now may not be high, but the near doubling of mortgage interest rates in just a few months is the fastest increase on record.
