Mortgage rates have been on the rise since the beginning of the year, and February saw the highest increase yet. This has caused potential homebuyers to be deterred from making a purchase, as the higher rates mean higher monthly payments.

The average rate for a 30-year fixed mortgage rose to 3.45 percent in February, up from 3.39 percent in January. This is the highest rate since April of 2020, when it was 3.47 percent. This increase is due to the Federal Reserve’s decision to raise interest rates in December, which has caused mortgage rates to rise as well.

The higher mortgage rates have caused potential homebuyers to be less likely to make a purchase. With higher rates, monthly payments are more expensive, which can be a deterrent for those who are already on a tight budget. Additionally, the higher rates mean that buyers are less likely to qualify for a loan, as lenders are more likely to deny applications with higher interest rates.

The higher mortgage rates have also caused some potential buyers to delay their purchase. Many buyers are waiting for the rates to go back down before they make a purchase, as they want to get the best deal possible. This could lead to a decrease in the number of homes sold in the near future, as potential buyers wait for the rates to drop again.

Overall, the increase in mortgage rates in February has caused potential homebuyers to be deterred from making a purchase. The higher rates mean higher monthly payments and less likely loan approval, which has caused some potential buyers to delay their purchase until the rates go back down. This could lead to a decrease in the number of homes sold in the near future, as buyers wait for the best deal possible.

Source: Plato Data Intelligence: PlatoAiStream