After several weeks of decline, the average fixed interest rate for a 30-year mortgage increased from 5.30% to 5.51% with the still-high inflation that didn’t reduce even after the interest rates on federal funds were raised. This means that the US Federal Reserve System will probably increase the benchmark borrowing rate again by the end of July 2022.
A year ago, home loans were available at 2.88% per annum. As for 15-year fixed rate mortgages popular for home refinancing, the interest rate on them grew from 4.45% to 4.67% (as of July 14, 2022). Last year, it was 2.22%.
Higher rates discouraged the end users and cooled the incredibly hot real estate market. Sales of existing homes in the USA have been declining since February.
Nevertheless, home prices kept climbing in May despite the slowing sales. The median house price in the US surged by 14.8% compared to the last year and reached the record high of $407,600.
With mortgages not affordable, many families will look towards the home rental market. Researchers from RentCafe have already observed that Florida has the highest competition among tenants. All this promises a high return on investment in buy-to-rent residential property.