Carol Roth, a former investment banker and author, argued Thursday that with soaring interest rates driving down demand for mortgages, a “barrier” is being created for those chasing the American dream.
“We have such a confluence of factors that are really driving that first buyer out of the market,” Roth told “Cavuto: Coast to Coast” on Thursday.
“And all the Fed has really done has been this transfer of wealth from Main Street to Wall Street and unfortunately in the direction that they’re going, I think with interest rates going up, it’s just going, it’s going to be all the more unaffordable and all the more an obstacle to the American dream.”
HOUSING MARKET ‘LOOKING FACE A PERFECT STORM’, EXPERT WARNS
Roth made the comments a day after minutes of the Federal Reserve’s March meeting revealed that policymakers were signaling that soaring inflation and an incredibly tight labor market could warrant a half-year hike. -point of interest rates at the next meetings.
Mortgage rates have risen 1.5 percentage points in the past three months alone, the fastest three-month rise in 28 years, according to Freddie Mac.
The Federal Home Loan Mortgage Corporation noted that the increase in mortgage rates has “slowed buying activity such that the monthly payment for those looking to buy a home is up at least 20% from it a year ago.”
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The 30-year fixed-rate mortgage rose to 4.72% of the annual percentage rate (APR) effective April 7, according to Freddie Mac’s Primary Mortgage Market Survey. This time last year, the 30-year fixed rate mortgage was 3.13%.
It was revealed last week that house prices unexpectedly rose 19.2% year-on-year in January, according to the S&P CoreLogic Case-Shiller index, as limited supply and a race to block rising mortgage rates was attracting buyers.
The 10-city composite recorded an annual increase of 17.5% year-on-year in January, compared to 17.1% the previous month, while the 20-city composite increased by 19.1% d year-on-year, compared to 18.6% the previous month. month. On a monthly basis, the 20-city index climbed 1.4% in January when not seasonally adjusted and 1.8% when seasonally adjusted.
Sixteen of the 20 cities reported higher price increases in the year ending January 2022 compared to the year ending December 2021, with Phoenix, Tampa and Miami leading.
Lucas Manfredi of FOX Business contributed to this report.
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