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In Hannity, Sean Hannity analyzed how the Fed’s rate hike will negatively impact mortgage rates and the housing market in Joe Biden’s cratered economy.
SEAN HANNITY: The Fed’s massive three-quarters of a point rate hike this morning. This is the Fed’s third hike since Joe Biden took office. Goldman Sachs, for example, predicts that the next two years will be no less than 11, maybe more. Anyway, three so far, many more to come. And as inflation eats away at savings and retirement funds, watch it all. you all see it
FED RATE HIKE WILL HAVE ‘DEVASTATING’ EFFECTS ON CONSUMERS, FORMER HOME DEPOT CEO WARNS
Donald Trump predicted it. It’s hurting Americans across the country, especially the poor, middle class, people on fixed incomes. Two-thirds of Americans now live paycheck to paycheck. Unfortunately, rate hikes, for example, aren’t good for real estate values, to say the least. Let’s break down what this rate hike means. For example, many Americans were getting mortgages now under Donald Trump in 2020 with interest rates around 3%, some as much as 2% lower.
LEAGUE CITY, TX – JUNE 16: A for sale sign sits near an apartment building in the Magnolia Creek subdivision on June 16, 2005 in League City, Texas. The US Commerce Department said on June 16 that new home construction rose 0.2 percent in May as the housing market continued to boom, fueled by low mortgage rates. (Photo by Dave Einsel/Getty Images)
At that time I was talking about a 30-year fixed interest rate. Now if you bought a $400,000 home, let’s say you put 20% in, your monthly payment on a 30-year loan would be $1,993 per month. At the end of 30 years, the entire mortgage, paid with interest, bought a $400,000 home. It would be $485,600. Now interest rates are going up by half a point or half a percent. Your payment increases by $100 and the total payment paid over 30 years increases by $32,000. Another half point. You see a $200 increase each month and a total of $64,000 increase.
That’s at 4% interest. Now, prior to today, a 30-year fixed-rate mortgage averaged 6.3 percent. At that rate, your monthly payment would be $500 more than it would be in 2020. And the total amount you would pay over the course of your loan would be $203,000. Wow. It’s going to be a lot worse today. Interest rates are now expected to rise to 7.5%.
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This article was written by Fox News staff.