High Monthly Housing Expenses Are a Cause for Pause
With high median monthly mortgage payments, prospective buyers and sellers aren't too eager to jump into the for-sale market
Sept. 14, 2023
Image: Nuthawut / stock.adobe.com
The U.S. housing market is experiencing an unprecedented affordability crisis, with the median monthly mortgage payment reaching a record high of $2,632 due to mortgage rates above 7% and a 4% year-over-year increase in home prices.
Low inventory is a key factor driving price increases, but it's also causing some prospective buyers to step back, resulting in a 12% year-over-year decline in pending home sales. The possibility of a rate hike in November or December could maintain high mortgage rates through year-end, according to Redfin, though new economic data over the next several months may influence rate trends.
This week’s CPI report shows that inflation came in a touch higher than anticipated. That doesn’t change the expectation that the Fed is highly unlikely to hike interest rates next week, but it does make a rate hike in November or December appear more likely.
