The 5% Bond Market Means Pain Is Heading Everyone’s Way
Housing Market Pain
For many consumers, mortgages are the first place that dramatic moves in interest rates really make their presence felt. The UK has been a prime example this year. Many who took advantage of pandemic-era stimulus to take out a cheap deal are now having to refinance, and are facing a shocking jump in their monthly payments.
As a result, transactions are falling and house prices are under pressure. Lenders are also seeing a rise in defaults, with one measure in a Bank of England survey rising in the second quarter to the highest level since the global financial crisis.
The mortgage-cost squeeze is a story playing out everywhere. In the US, the 30-year fixed rate has surpassed 7.5%, compared with about 3% in 2021. That more-than-doubling in rates means that, for a $500,000 mortgage, monthly payments are roughly $1,400 extra.
https://www.bloomberg.com/news/artic...premium-europe
Housing Market Pain
For many consumers, mortgages are the first place that dramatic moves in interest rates really make their presence felt. The UK has been a prime example this year. Many who took advantage of pandemic-era stimulus to take out a cheap deal are now having to refinance, and are facing a shocking jump in their monthly payments.
As a result, transactions are falling and house prices are under pressure. Lenders are also seeing a rise in defaults, with one measure in a Bank of England survey rising in the second quarter to the highest level since the global financial crisis.
The mortgage-cost squeeze is a story playing out everywhere. In the US, the 30-year fixed rate has surpassed 7.5%, compared with about 3% in 2021. That more-than-doubling in rates means that, for a $500,000 mortgage, monthly payments are roughly $1,400 extra.
https://www.bloomberg.com/news/artic...premium-europe
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