Over the past month, mortgage interest rates have decreased, which is good news for new borrowers. For every $100,000 borrowed, the recent drop in rates will save them approximately $21 per month. As of this week, the average interest rate for 30-year fixed-rate mortgages in the United States was 6.27%. This marks a notable improvement from the 6.6% rate observed last month.
While recent forecasts for changes in interest rates are mixed, the overall trend is slightly lower. This means that it is unlikely that we will reach the historical average mortgage interest rate of 7.75% in 2023. In comparison to the long-term average, homeowners who obtain a mortgage at today’s rates are saving about $100 per month for every $100,000 borrowed. This has made it somewhat more affordable to purchase a home in the current market.
However, it is worth noting that mortgages are more expensive now than they were a year ago. The average increase in monthly payments per $100,000 borrowed for a 30-year fixed-rate mortgage is around $63 per month over the past year. For those who obtain a conventional mortgage at the maximum amount, this translates to an increase of approximately $460 in their monthly payment compared to April 2022.