Buying a house just got even more expensive

by Admin
Mortgage rates are rising again. Here's how much the steeper rates will cost you

The cost of buying a new house just hit another all-time high, according to new data. 

Findings from Redfin show the median U.S. home sale price soared to $397,954 in June – a nearly 5% increase from a year earlier. That marks the highest level on record and the biggest annual increase since March.

The monthly mortgage payment at that price, when accounting for the 6.86% median interest rate for a 30-year mortgage, is now $2,749. That is roughly $88 shy of April’s record, thanks to a slight drop in mortgage rates.

“High mortgage rates and record-setting home prices have made affordability the biggest challenge in the housing market in 2024,” said Lisa Sturtevant, Bright MLS chief economist. “Even as more inventory comes onto the market, more buyers are being priced out in markets across the U.S. Some buyers are going to wait for rates to come down in the second half of the year which means that it could be a relatively slow summer for home sales.” 


A home for sale in Huntington, New York, on Aug. 5, 2020. (Photo by Thomas A. Ferrara/Newsday RM via Getty Images / Getty Images)

There are a number of driving forces behind the affordability crisis. 

Years of underbuilding fueled a shortage of homes in the country, a problem that was later exacerbated by the rapid rise in mortgage rates and expensive construction materials.

Higher mortgage rates over the past three years have also created a “golden handcuff” effect in the housing market. Sellers who locked in a record-low mortgage rate of 3% or less during the pandemic began have been reluctant to sell, limiting supply further and leaving few options for eager would-be buyers.


Economists predict that mortgage rates will remain elevated for most of 2024 and that they will only begin to fall once the Federal Reserve starts cutting rates. Even then, rates are unlikely to return to the lows seen during the pandemic, with investors predicting just one or two rate reductions this year.

For sale sign outside of an Atlanta home

A sign outside a home for sale in Atlanta on Sept. 6, 2023. (Photographer: Elijah Nouvelage/Bloomberg via Getty Images / Getty Images)

Mortgage buyer Freddie Mac said Thursday that the average rate on a 30-year loan this week inched higher to 6.95%. While that is down from a peak of 7.79% in the fall, it remains sharply higher than the pandemic-era lows of just 3%.

Available home supply remains down a stunning 34.3% from the typical amount before the COVID-19 pandemic began in early 2020, according to a separate report published by

Most homeowners say they are nearly twice as willing to sell their home if their mortgage rate is 5% or higher, according to a Zillow survey. Currently, about 80% of mortgage holders have a rate below 5%.

Source Link

You may also like

Leave a Comment

This website uses cookies. By continuing to use this site, you accept our use of cookies.