Buyers Waited for Falling Prices? Big Mistake

small wooden house by coin stacks

Buyers Waited for Falling Prices? Big Mistake

Source: Buyers Waited for Falling Prices? Big Mistake | Florida Realtors

Some buyers waited for bargain homes that appeared after the Great Recession – but to counter higher mortgage rates, year-to-year prices have to drop 45%.

CHICAGO – Despite slowing or falling home prices, rising mortgage rates are responsible for many first-time buyers still finding homes unaffordable.

Nationwide, a median mortgage payment is now about 77% higher than it was a year ago, mainly because of higher rates. Assuming those rates don’t change, home prices would have to dive 45% for monthly mortgage payments to return to year-ago levels.

On the other hand, if average mortgage rates rise another 1%, home prices would have to be down about 50% year-to-year for monthly payments to be equal.

“With rates … not likely to return to those 3% levels anytime soon, even a 10% decline in prices is not going to offer much of a bargain,” says senior economist George Ratiu. “The only way I see mortgage rates stopping their upward trajectory is if the economy dives into a severe recession.”

Source: (11/07/22) Trapasso, Clare

© Copyright 2022 INFORMATION INC., Bethesda, MD (301) 215-468

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.