From early 2022 to late October, the U.S. weekly 30-year fixed-rate mortgage rose just above 3% to over 7% before leveling off at 6.42% at the end of the year. That sharp increase sent monthly mortgage payments from $1,925 on a median priced new home in early 2022 to $2,923 on the same house by the close of the year, a 51% increase, according to NAHB Eye on Housing.
As a result, only 20.3% of U.S. households could afford a median priced new home at October’s 7.08% rate, a share that will fall even further if more rate hikes are introduced in the year ahead.
When interest rates increased from 3.22% to 4.22% as of the middle of March 2022, the percent of households that can afford median-priced new homes decreased to 30.4% from 34.2%. The monthly mortgage payment, which includes principal and interest, but excludes taxes and insurance, for the same home increased from $2,165 from $1,925.
An increase from 4.22% to 5.22% as of early May 2022 priced additional 5 million households out of the market for the median-priced new homes.
Advertisement
Related Stories
Housing Markets
Metros Where Housing Prices Have Doubled in Less Than 10 Years
Historical data show it's taken less than 10 years for home prices to double in 68 of the country’s 100 largest cities
Housing Policy + Finance
Even With Inflation Running Hot and Elevated Mortgage Rates, Buyer Demand Rises
Mortgage rates will likely stay high for the next few months, but that doesn't seem to be deterring homebuyers
Financing
Q1 2024 Foreclosure Activity Rises Slightly
Data show New York, Houston, and Chicago topping the list of major metros with the greatest number of foreclosure starts during Q1 2024
