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Sean Hannity analyzed how the Fed’s rate hike will negatively affect mortgage rates and the housing market on Joe Biden’s economy in “Hannity.”
SEAN HANNITY: Earlier today, the massive three-quarter point rise in the Fed rate. Now, this is the Fed’s third increase since Joe Biden took office. Goldman Sachs, for example, predicts that in the next two years, up to 11, maybe more. Anyway, at least I didn’t go down without explaining myself first. And since inflation is running out of savings and retirement funds, you’re all watching. You are all watching.
THE INCREASE IN FED RATES WILL HAVE A “DEVASTATING” IMPACT ON THE CONSUMER, WARNS THE FORMER CEO OF HOME DEPOT
Donald Trump predicted it. It is harming Americans across the country, especially the poor, the middle class, the fixed income people. Two-thirds of Americans now live check to check. Unfortunately, rate hikes are not good, for example, for property values, to put it mildly. Let’s break down what this rate hike means. For example, now under Donald Trump in 2020many Americans were getting mortgages with interest rates around 3%, some even lower by two.
LEAGUE CITY, TX – JUNE 16: A poster sold is near a home site in the Magnolia Creek subdivision on June 16, 2005 in League City, Texas. The U.S. Department of Commerce announced on June 16 that new home construction rose 0.2 percent in May as the real estate market, driven by low mortgage rates, continued to boom. (Photo by Dave Einsel / Getty Images)
At the time, I was talking about a 30-year fixed rate. Now, if you bought a $ 400,000 home, suppose you cut it down by 20%, your monthly payment on a 30-year loan would be $ 1,993 a month. At the end of 30 years, the full interest-paid mortgage bought a $ 400,000 home. It would be $ 485,600. You now increase your interest rate by half a point or half a percent. Your payment increases by $ 100 and your total payment paid over 30 years increases by $ 32,000. Another halfway point. You’re looking at a $ 200 increase every month and a total increase of $ 64,000.
This is at 4% interest. Now, before today, a 30-year fixed mortgage had an average, well, a weird 6.3 percent. At this rate, your monthly payment is $ 500 more than it would have been in 2020. And the total amount you would pay along with your loan would be $ 203,000. Wow! Now, today, it gets much worse. Rates are now expected to rise to 7.5%.
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This article was written by Fox News staff.