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What do higher interest rates mean for home buyers?

According to the National Association of Realtors [1], about 87% of home buyers use some sort of financing to purchase a new home. On average, they finance about 88% of the value of their home purchase (even more for first-time home buyers). These statistics mean that the purchasing power these home buyers have – measured by the mortgage interest rate – makes a big difference. According to the Federal Home Loan Mortgage Corporation (FHLMC, known as “Freddie Mac”) [2], here are the current national averages for certain mortgages: As you will notice, these rates are up from the 2.66% rate ...
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