The average rate on a 30-year fixed-rate mortgage jumped to 4.95% on Friday according to Mortgage Daily News.
At the start of the year, they were around 3.17%. In January of 2021, they were just 2.65%.
Friday’s leap represents a 15.6% increase in a mortgage payment since January and a 19% increase since January of 2021.
In other words, a mortgage payment will now cost a Minneapolis or St Paul duplex buyer nearly 20% more than it would have one year ago.
If you’re thinking about selling your property, perhaps the more tangible way to think of this is for every increase in mortgage rates of 1%, buyers experience an $8000 reduction in the amount they can afford to spend to acquire a property. Interest rates are up more than 2% year over year, which means a buyer who qualified to purchase a $400,000 duplex one year ago can now spend just $384,000.
The good news is inventory continues to be low, and there are many buyers who won’t be as impacted by the increase in interest rates in the near term.