Unbelievable: Mortgage rates hit their highest level in 20 years – Dr Boyce Watkins

The average rate for a 30-year fixed mortgage is now at its highest level in over 20 years, Freddie Mac reported Thursday.

Freddie Mac’s latest Primary Mortgage Market Survey shows that the average rate for the benchmark 30-year fixed note hit 7.09% this week for the first time since 2002, topping 7% for the first time since last November after rising from 6.96% the week before.

When mortgage rates are too high, families may struggle to make their monthly payments, leading to financial stress and limited disposable income. High rates can consume a significant portion of a family’s earnings, diverting funds from other essential needs such as education, healthcare, and savings. This can perpetuate a cycle of debt, as families may resort to high-interest loans or credit cards to cover basic living expenses.

High mortgage rates can also deter families from becoming homeowners, perpetuating wealth inequality, as property ownership is a key avenue for building wealth. Furthermore, high rates can trigger a decrease in property values, potentially leaving families with mortgages that exceed the worth of their homes—a situation known as being “underwater”—which makes selling the property and relocating a challenging prospect. Additionally, high mortgage rates may lead to increased foreclosure rates, which has devastating emotional and financial consequences for families.

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