“Bidenomics” is taking its toll on the U.S. housing market, as mortgage rates hit their highest level in more than two decades.
On Wednesday, the average rate on a 30-year fixed mortgage hit 8 percent, marking the highest level recorded since 2000. According to the Committee to Unleash Prosperity, this estimate means “that on a $500,000 home purchase, Americans will pay an approximate $1,500 a month Biden mortgage tax” for 30 years. For context, the average rate on a 30-year mortgage was 2.65 percent when former President Donald Trump left office in January 2021.
With higher mortgage rates, homebuyers are becoming increasingly wary of purchasing a new home in the current market. For example, a recent Fannie Mae survey found 83 percent of consumers “believe mortgage rates will stay at their current elevated level or rise further in the next 12 months.” Separately, 84 percent agreed that “now is a bad time to buy a home.” The latter percentage is the “highest share on record,” according to Yahoo Finance.
Higher rates have conversely led to a limited number of homes on the market, as sellers are fearful of having to purchase a new home under the current rates.
“Mortgage rates are expected to remain elevated for the time being,” Hannah Jones, an economic research analyst, told Yahoo. “It seems that [mortgage lock effect] is going to be the mode of operation until something shifts substantially, [such as] inflation has made big improvements.”
Despite President Joe Biden and his administration’s insistence that the U.S. economy is all hunky-dory, everyday Americans are struggling to afford basic necessities due to high inflation rates. According to the Bureau of Labor Statistics, in September, the Consumer Price Index increased 3.7 percent year-over-year and rose 0.4 percent for the month after rising 0.6 percent in August.
As noted in a Las Vegas Review-Journal op-ed, that 3.7 percent year-over-year increase is “a long way from the Federal Reserve’s inflation target of 2 percent” and “is building on 7 percent annual inflation in 2021 and 6.5 percent in 2022.”
Shawn Fleetwood is a staff writer for The Federalist and a graduate of the University of Mary Washington. He previously served as a state content writer for Convention of States Action and his work has been featured in numerous outlets, including RealClearPolitics, RealClearHealth, and Conservative Review. Follow him on Twitter @ShawnFleetwood
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