What does an 8% mortgage rate mean for YOU? Higher rates will cost the average American homeowner an extra HALF A MILLION dollars in the course of a 30-year loan

Homebuyers today have to pay $500,000 more for a 30-year mortgage than they would have two years ago, after interest rates rose to 8 percent.

Analysis by DailyMail.com found that someone buying a $400,000 home in 2021 would pay just $1,621 on their loan each month.

Today, however, that figure stands at $2,788 – a difference of more than $1,100 per month. The findings assume the house was purchased with a 5 percent down payment.

Over the course of a 30-year loan, that means someone buying today would have to make more than $1 million in mortgage payments. It’s almost double the $583,416 they would pay for a loan taken out in October 2021 when interest rates were still 3.09 percent.

Mortgage News Daily reported that the average interest rate on a 30-year loan rose to 8 percent for the first time since 2000.

Homebuyers today have to pay $500,000 more for a 30-year mortgage than they would have two years ago after interest rates rose to 8 percent

Homebuyers today have to pay $500,000 more for a 30-year mortgage than they would have two years ago after interest rates rose to 8 percent

It is one of the three major indexes that report mortgage rates in the US. The other two – Freddie Mac and the Mortgage Bankers’ Association – set rates at a slightly lower 7.63 percent and 7.7 percent, respectively.

The latest figures show just how much of a burden rising interest rates are having on the average homeowner.

Mortgage rates have been pushed up by the Fed’s aggressive rate hike campaign, taking them from near zero to between 5.25 and 5.5 percent.

Although the Fed’s fund rate does not directly determine mortgage rates, it does influence them.

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Instead, lenders track the yield on 10-year U.S. Treasury bonds, which is determined by the Fed’s actions, investor reactions and predictions about what the Fed will do next.

As a general rule of thumb, when government bond yields rise, mortgage rates follow suit. The same goes if they refuse.

Last week, the Mortgage Bankers Association, the National Association of Realtors and the National Association of Home Builders wrote a letter urging the Fed to stop raising interest rates.

Fed officials will next meet on October 31 to discuss the possibility of a rate hike, but experts largely expect rates to remain stable at current levels.

Existing home sales fell to 4.04 million annually in August, down 15.77 percent from last year, according to figures from the National Association of Realtors (NAR).

Existing home sales fell to 4.04 million annually in August, down 15.77 percent from last year, according to figures from the National Association of Realtors (NAR).

Figures from the Mortgage Bankers Association show home purchase applications fell by 5.7 per cent in the week to October 4 - the lowest level since 1995

Figures from the Mortgage Bankers Association show home purchase applications fell by 5.7 per cent in the week to October 4 – the lowest level since 1995

But the rising cost of homeownership has already poured cold water on America’s red-hot real estate market.

According to figures from the National Association of Realtors (NAR), sales of existing homes fell to 4.04 million annually in August, a decline of 15.77 percent from the same month last year.

Meanwhile, Chen Zhao, head of economics research at real estate brokerage Redfin, told the newspaper

it expected the total number of existing home sales to reach approximately 4.1 million in 2023. It would mark the smallest number of sales since 2008 – the year the Lehman Brothers went bankrupt.

According to the Mortgage Bankers Association, mortgage applications also fell to the lowest level since 1995 at the end of September.