The U.S. housing market is on fire. Prices have skyrocketed and seem to do so every month. Inventories are so tight that in some cities and towns there are bidding wars for individual housing. People moving from the large east and west coast cities looking for better lifestyles and the freedom of working from home have caused unprecedented price surges in places like Idaho. Most middle-class and upper-class Americans did not have incomes damaged by the COVID-19 pandemic. Finally, mortgage rates are at or near all-time lows, thanks largely to efforts by the Federal Reserve to keep mortgage rates down to lift the economy.
Mortgage interest rates are complicated. Duration of mortgage is one factor. The majority of mortgages are for 15 or 30 years. There is also the matter of how long the interest rate is fixed. In some cases, the period is 30 years. That number can drop as low as five years, and usually, after that, the rate resets based on the prime rate charged by banks.
24/7 Wall St. looked at interest rates by state as posted by Value Penguin. It looked at 30-year mortgage numbers, showing both the average rate and the range of rates from low to high. Its researchers said, “Current mortgage rates everywhere tend to move up or down in unison, and may reflect slight differences based on your state of residence.”
In many states, the average rates were above 4%. The lowest was in Hawaii, where the average rate was 3.75%. Value Penguin did not explain why the Hawaii figure was so low. The range for the state was 3.25% to 4.38%.
The Motley Fool reports that Hawaii has the highest median home price among all 50 states at $646,733. In the state’s largest city, Honolulu, the price is even higher at $705,049. Hawaii also has the fourth-highest median income among all states at $83,102. It has the highest cost of living among all states as well.