Home buyer interest rates soar, making loans risker

(NBC) - Home buyers around the country have begun turning to riskier loans as interest rates soar.

Loans promoted to home buyers include adjustable rate mortgages, 2-1 buydowns, which artificially lower rates for the first two years, and interest-only mortgage.

Which borrowers pay a lower monthly payment for several years by only paying the loan's interest.

Industry experts say they don't expect the U.S. to see a repeat of the last mortgage crisis because of regulations put in place and the higher standards as to who qualifies for a mortgage.

Rates for a standard 30-year fixed-rate mortgage have doubled since the start of the year; monthly payment on a $400,000 mortgage now costs $865 more a month than it did in January.

Although interest rates are rising, home prices began to decline and the trend will continue.

Prices should remain well above their pre-pandemic levels through 2023, according to estimates by Goldman Sachs and Ratings Agency Fitch.