Mortgage rates rose this week, going back to the same level as a couple of weeks ago. According to Freddie Mac, the average rate on a 30-year fixed mortgage ticked up to 6.39% from 6.35% the previous week. These fluctuations in rates will continue to persist, affecting the housing market as mortgage rates have a direct impact on the monthly mortgage payment. But with inflation easing further and the Federal Reserve expected to pause its rate hikes soon, mortgage rates will stabilize near 6% in the second half of the year.
With a 6.4% rate, the typical buyer can afford to purchase a home up to $380,000 – $9,000 or 2% less than the median-priced home if they put 20% down. About 45% of the listings are in this price range. For buyers who decide to put 14% down – the median down payment in 2022 – they will need to look for less expensive homes up to $355,000.
Source: Nadia Evangelou, Senior Economist & Director of Real Estate Research for the National Association of REALTORS®.