Rapid Rise in Monthly Mortgage Payments Sparks Concerns over Price Surge

Monthly mortgage payments in the US have increased by nearly 20% compared to last year, with the median home sale price rising by 3.2%. The mismatch between supply and demand is driving up home prices, as homeowners hold onto their lower mortgage rates while prospective buyers are deterred by high rates. The average rate for a 30-year fixed-rate mortgage is currently 6.9%. Despite higher rates and lower purchase demand, home prices continue to increase due to very low unsold inventory. First-time homebuyers would need to earn close to $64,500 to afford a starter home, which is selling at a record $243,000, up over 45% from before the pandemic.