Homebuyers Wonder if Now Is a Good Time

Americans are wondering whether or not they should buy a home now, before interest rates increase again, despite the fact that monthly housing payments are already rising significantly.

Even though home price appreciation is slowing down, they are still growing, and combined with rising interest rates, the average monthly housing payment for homebuyers grew more than $1,000 per year. Redfin chief economist Daryl Fairweather explains, “Every fall and winter we see prices decline relative to spring and summer, but this year’s seasonal declines have been more extreme," adding, “Sellers haven’t quite come to terms with the fact that they no longer have buyers wrapped around their finger. This push and pull is likely to continue until early 2019 when the homebuying season picks back up.”

A homebuyer with a housing budget of $2,500 a month and a 20 percent down payment could afford to purchase a home for as much as $473,750 at the beginning of the year when 30-year mortgage rates were averaging around 4 percent. Now that rates have climbed above 4.75 percent, that same buyer can only afford to buy a home for up to $444,000—a loss of $29,750 in purchasing power.

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