Very little attention is paid to those who are being punished – through NO FAULT OF THEIR OWN – by the fallout from out-of-control government spending. Would-be homebuyers are among those silent victims.
Inflation’s been through the roof, as you know, which triggered the Fed to significantly raise interest rates. If you or someone you know has wanted to purchase a home recently, it’s a disaster! Let’s just look at some simple numbers…
Let’s say you wanted to borrow $200,000 to purchase a home using a 30-year fixed-rate mortgage. It wasn’t long ago that interest rates on a 30-year mortgage were around 3%. Now they’re hovering around 8%.
That means your monthly payments are roughly $620 higher each month to cover that difference at 8% vs. 3%. That’s a HUGE amount for most families to swallow, especially given inflation has made everything else they’re paying for significantly more expensive.
And if you bite the bullet now, hoping to refinance in a few years once rates come down, consider this:
⛔️ In just the first 5 years of your mortgage, you will have paid almost $60,000 more interest at 8% than 3%. $59,639.43 to be exact, according to the amortization chart. Again, that’s just the first 5 years into the mortgage!
Here’s the bottom line:
1️⃣ Many lower- and middle-income earners are no longer able to afford a home because of interest rates.
2️⃣ Interest rates are where they are because of rapidly rising inflation.
3️⃣ Inflation skyrocketed, in large part, because reckless politicians in Washington decided to borrow trillions of dollars and dump it into an economy that was already overheated, all under the guise of so-called “Covid relief.” All while lying to you with legislation titles like the “Inflation Reduction Act.”
➡️ Every bit of this borrowing and spending was ill-advised from the start, and the fallout was completely predictable. Would-be homebuyers are just the tip of the iceberg when it comes to the victims of this bad governance.