Home prices are falling, mortgage rates are up, what are payments like?
Higher mortgage rates have limited buying power in the housing market, and housing prices are starting to cool off in several areas. So, there are still homes being bought and sold. What do mortgage payments look like? Business Insider details what people are paying for their homes in several of the most popular metro areas in the country.
Home prices at peak in Denver, CO were just over $650,000. Today, the average home price is down to $622,434. That’s a decrease of 4.3%. However, a monthly mortgage payment for a house at peak prices was $2,821. Now? A monthly mortgage payment in Denver sits at $3,923. Why? The mortgage rate has increased by 36.4% from the peak identified in the article to the time period identified as current day.
A similar story was true for the other five metro areas identified.
Where are housing prices headed?
Financial Advisor crunched the numbers and looked into where housing prices are headed. A measure of home prices in August 2022 fell 1.3% comparing month over month. That represents the largest month over month decline in home prices since 2009.
Home prices appear to be past their peak for now. If this trend continues, potential home buyers that took themselves out of the market due to the combination of higher rates and prices may start to jump back in.
How is the current environment impacting renters & landlords?
Bloomberg News observed that landlords have started to lower rent for new tenants and ease off big increases for existing tenants. Average monthly rent has been trending upwards for a while, but increases have finally started to slow and could actually start to reverse in some markets.
Rising rent has been a challenge from coast-to-coast and has impacted renters’ pocketbooks in a similar fashion to rising gas and food prices.
Increasing home prices and mortgage rates have taken several potential home buyers out of the market, but rising rent prices have also hurt the ability to afford a home. Hopefully, apartment and home rental will further cool off and make renting more affordable.
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