Following the rise in US Treasuries last week, 30 Year Mortgage rates increased 14bp (0.14%) to 3.89% for the week ending 2.10.22. For a $100,000 loan, the payment increase went from $463 to $471. This was BEFORE the Consumer Price Index announcement of 2.10.22.
Mortgage rates are on an upward trajectory and are at levels that prevailed just prior to COVID impacting the country in March 2020.
With unemployment at a low level and inflation on the rise, the Fed will likely begin increasing interest rates. The Fed's next meeting is March 15---possible increase before then? Given the projections that are out there, it is possible we may see 5.00% mortgage rates later this year.
This would cause the payment to increase from $471 to $537 or about $2/day per $100k borrowed. The amount of the loan going to amortization would decrease from 30% to 22% of the payment. Note that the amount of income to qualify for a loan increases from $20,200 to $23,000. This will have a SEVERE impact on first-time home buyers. Loan balance to Income will decrease from a 5:1 ratio to ~4:1
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