At 7.28%, the American dream just got a $215-a-month surcharge

The 30-year mortgage rate crossed 7% last week for the first time in 19 months. This week it hit 7.28%, the highest since November 2023 and the biggest one-week jump in four years. A year ago it was 6.34%. It is not the highest ever. In 1981, it reached 18.63%, and people still bought homes. I am not here to tell you this is the worst it has been. I am here to tell you what it does to a family that was close. Take the median home in America, $429,100 in August. Put 20% down, which is about $86,000 in cash that most young families do not have. At last year’s rate, the monthly principal and interest on what is left comes to roughly $2,130. At today’s rate, it is about $2,350. That is around $215 more every month, for the same house, and it comes before property taxes and insurance. Now set that against the paycheck. The median household in America made $87,460 last year, a record. That $2,350 payment alone eats about a third of it before taxes. The usual rule of thumb says housing should take 28%. You can see the problem. Wages are rising. They are not rising $215 a month for each buyer. Why today’s rate spike traps buyers and sellers alike What rate hikes do is quiet. Nobody gets tu...