A new WalletHub report finds that Missouri’s average mortgage rate is the second-largest increase in the country. During the first six months of this year, the rate rose over three percentage points to 6.3%.

Missouri Bankers Association President Jackson Hataway said the rate is falling more in line with historical norms, meaning that the market is beginning to even out.

“We just have a very recent mental comparison that makes us think this is much more than it was,” Hataway said. “Compared to historical averages, we’re still kind of below the median or right at it, roughly. We’ll probably see them go down now. So, we’ll start to trend back towards the environment we were used to.”

Overall, however, Hataway said that current rates are still below historical averages. He said it’s possible the mortgage rates could move closer to the historically low rates seen during COVID-19, but unlikely. Hataway said residents should not be uncomfortable with the idea that the rate is at 6%, adding that’s where the market “tends to want to be.”

He said that several factors go into why the rates go up.

“It can have to do with Fed policy, the bond market. In this article that in particular referencing, they talked about the delinquency rate on mortgages, all of these things factor into why, in some cases, mortgage rates go up or particular borrowers they’re up compared to others.”

Additionally, that same report found that Missouri ranks in the top 20 among states where mortgage delinquency is increasing the most. Hataway said the mortgage delinquency rate may not necessarily be true, considering he’s unsure what information and measurements WalletHub is using to make that determination. He does say rates are up, but not to levels where banks should be concerned.

“Largely because people’s debt to income ratios are still in fine standing, but it does affect the way that you can issue a mortgage,” he explained. “If you see some delinquencies, that means you have to risk rates appropriately to cover for the potential for more of those mortgages to pay a little late.”

To see the report, click here.

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