Here’s how the latest interest rate increase is affecting monthly mortgage payments

Americans who didn’t buy a home during the COVID-19 pandemic may suffer from sticker shock when they look for financing today.

JACKSONVILLE, Fla. – For the first time in more than a decade, home mortgage rates have jumped above 5%, and with inflation the highest it’s been in 40 years, the goal of homeownership is more expensive than ever before.

News4JAX is showing you how this latest interest rate increase is affecting monthly mortgage payments.

Americans who didn’t buy a home during the COVID-19 pandemic may suffer from sticker shock when they look for financing today.

This latest hike follows last week’s announcement from the federal reserve about plans to boost interest rates at a faster pace -- as a way to fight inflation on everything from groceries to cars, to gas.

News4JAX crunched the numbers on a $250,000 home loan, without taxes, insurance, and fees, finding that a year ago today the average 30-year fixed interest rate was 3.04% -- amounting to a $1,059 a month mortgage payment. That same $250,000 home loan at today’s 5% interest rate amounts to a payment of $1,342. That’s $283 extra a month, which is $3,386 extra a year.

Economists say the interest rate hike could increase home sales in the coming weeks as people looking for houses scramble to buy a home in fear that mortgage rates could rise once again.

Federal officials are hoping that higher interest rates will help to slash inflation, while homes remain in short supply.

In March, Jacksonville home prices were up 25.5% compared to last year, selling for a median price of $295,000, according to Redfin.

What remains unclear is whether or not the Fed will raise interest rates once again.


About the Author:

Tarik anchors the 4, 5:30 and 6:30 p.m. weekday newscasts and reports with the I-TEAM.