On Friday’s broadcast of “CNN This Morning,” co-host Phil Mattingly and CNN International host Julia Chatterley discussed the surge in mortgage rates and said that the skyrocketing mortgage rates have contributed to “the worst affordability crisis in housing that we’ve seen for four decades” that won’t “really change until the Federal Reserve starts to bring rates down, these things ease, people start to sell their homes, and that’s going to take some time” and that comes as rent prices remain high and are one of the stickiest inflation components.
Mattingly stated, “[M]ortgage rates in the United States have soared to their highest level in more than 20 years. Now, according to the data from Freddie Mac, the 30-year fixed rate mortgage averaged above 7% over the week ending yesterday. A year ago, just over 5%.”
Chatterley added that “I think the other thing to remember, first and foremost, about this interest rate, it assumes a 20% down payment. It assumes you have an excellent credit score…so, if you don’t have those two things, actually you’re probably being offered –.”
Co-host Poppy Harlow then cut in to say “Worse.”
Chatterley responded, “Yes. So, that’s the first thing to remember. But this is just one component of actually what has combined to be the worst affordability crisis in housing that we’ve seen for four decades. You have sky-high — relative, sky-high mortgage rates. You also have a lack of supply of homes on the market. Then you also have actually near-record home prices, too. Combine all those things, you’ve got a triple whammy that’s having a pretty devastating effect. Let me just show you — to your point — what mortgage rates have looked like over the last few years. Now, if you were lucky enough to lock in rates in August of 2021, well done. Let’s say your mortgage repayment was $1,000 there. Today, your option is paying double that, even for above income — average income families. That’s a huge whack. So, you understand the problem here.”
She continued, “Now, it’s great — let’s be clear — if you’re a homeowner. But if the big American Dream is to own your home, perhaps leave that money to your kids one day, that’s getting further and further away, and it doesn’t really change until the Federal Reserve starts to bring rates down, these things ease, people start to sell their homes, and that’s going to take some time.”
Mattingly then pointed out, “It’s also coming as rent prices remain very high, one of the stickiest parts of the inflation issue as well.”
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