By Michael Gerrity | World Property Journal
According to national property broker Redfin, a U.S. homebuyer on a $3,000 monthly budget has lost $33,250 in purchasing power over the last six weeks, with the daily average 30-year fixed mortgage rate rising to 7% on October 28, 2024.
This is the first time mortgage rates have hit 7% since the start of summer; they’re up nearly one percentage point from the 18-month low they dropped to in mid-September. A homebuyer on a $3,000 monthly budget can afford a $442,500 home with the current 7% mortgage rate. The same homebuyer could have purchased a $475,750 home with a 6.11% rate — the average on September 17, 2024.
That buyer still has $17,000 more purchasing power than they would have had in April, when mortgage rates peaked at 7.5%. But the recent rise in mortgage rates is disappointing for buyers who missed out on the short window of rates that were much closer to 6% than 7%.
To look at affordability another way, the monthly mortgage payment on the $428,000 median-priced U.S. home is $2,895 with a 7% mortgage rate. That’s about $200 higher than the $2,694 monthly payment with a 6.11% rate.
