Mortgage rates have hit their highest levels in more than 20 years, making it much more expensive to borrow money to buy a house.
Brigham Young University economics professor Christian vom Lehn told KUTV mortgage rates usually rise along with inflation.
But with inflation cooling a bit recently, he hopes it will bring some relief.
“Our best guess right now is that we think they’re probably pretty close to peaking,” vom Lehn said in an interview. “We hope to see that these mortgage rates peak pretty soon and start coming down as we get into the end of this year and into 2024.”
The rates are sitting at around 7.09%, according to Freddie Mac, which is the highest since 2002.
According to Al Bingham at Momentum Loans in Sandy, Utah, if you want to borrow $400,000 today, it will cost you an extra $460 each month compared to earlier this year when rates were lower.
Over the life of a 30-year loan, that’s roughly an additional $165,000.
Hunter Chiniquy, who works as a realtor based in Utah County, is buying a condo for himself in Lehi. Asked how the price is, he said it’s “really awesome,” noting that buyers right now are often able to secure concessions from builders.
As for the rate, it’s a different story.
“The rate is high,” Chiniquy said. “Not as fun as you might want it to be.”
He said buyers today “have to be on board with a bigger monthly payment. That’s just the reality of a higher interest rate.”
Down the road, Chiniquy hopes to refinance and save some money. For now, though, he’ll swallow the higher rate and look forward to moving in.
Typically, higher mortgage rates push home prices down, vom Lehn noted. That happened in Utah for a bit after prices peaked in May 2022, but since the beginning of this year, home prices have mostly been rising.
