Mortgage rates in the US are nearly at the highest levels since December 2000! Because of this home buying demand AND supply (i.e. the number of homes for sale) is getting destroyed.
On the demand side, for someone looking to buy a median priced home in the US today compared to 2 years ago, it will cost them about $1,231 more per month in principal and interest payments, which represents a whopping 85% year-over-year increase. That’s due to the median sold price increasing from $365k to $407k (per NAR( but more importantly, from average 30yr fixed rates jumping from 2.9% to 7.4% (per the Mortgage News Daily) in the last two years.
This rise in mortgage rates and prices has caused housing affordability to drop to the lowest level on record (data going back to 1989 from NAR). In other words, housing affordability is AT LEAST a 3 decade low!
The surge in mortgage interest rates is also hurting the supply side of the equation too because homeowners don’t want to take on a 7%+ rate and lose their historically low rate. According to Redfin and NAR, there’s approximately 1.1M to 1.3M homes for sale nationwide as of July 2023. This is nearly 60% less than July 2016 and about 50% less than July 2019.
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To give you a quick mortgage interest rates update, according to the Mortgage News Daily the average 30yr fixed rate mortgage is around 7.5% for the current mortgage rates (at the time of filming this video for those with excellent credit).
Comment below: what’s your housing market forecast? Do you think a housing crash will happen or are your housing market predictions that the real estate market and home prices will continue to surge?
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*** Jason Walter, CPA (lic 103885) Sacramento real estate agent and native Realty ONE Group Complete (DRE 01923240) [email protected]
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Disclaimer: Jason Walter is not a practicing tax accountant or a licensed attorney or financial adviser. Therefore, the information in these videos shall not be relied upon as tax, legal, or financial advice from a qualified perspective. If you need such advice, please contact a qualified tax accountant, attorney, or financial adviser. We have taken reasonable steps to check that the information in this video is accurate but we cannot represent that it is free from errors. You expressly agree not to rely upon any information contained in this video - it is for entertainment purposes only.
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