Mortgage rates reach their highest level in 12 years;  Home buyers take a hit

Mortgage rates reach their highest level in 12 years; Home buyers take a hit

The woes continue to mount for the housing market, especially potential buyers.

Last bad news: the 30-year fixed-rate mortgage averaged 5.30% in the week ended May 12, the highest since July 2009, according to real estate agency Freddie Mac. That compares with 5.27% a week earlier and 2.94% a year earlier.

That means a year ago homebuyers were paying $294 in annual interest on every $10,000 of their mortgage, compared to $530 now. That’s an 80% increase.

“Rising mortgage rates year-to-date have the same impact on affordability as home prices rising more than 20%,” said Greg McBride, chief financial analyst at Bankrate.com, at Bloomberg.

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