The cost of buying a house hit another record high as mortgage rates spike again
ResiClub co-founder and editor-in-chief Lance Lambert discusses the U.S. housing affordability crisis on 'Making Money.'
The cost of buying a new house just hit a fresh record as mortgage rates rose to the highest level this year, according to a new report.
Findings from Redfin show the combinationof steep mortgage rates and elevated home prices has pushed the median monthly housing payment to a record $2,775 – an 11% increase from the same time last year.
«Market conditions for homebuyers remain challenging with few homes listed and costs for ownership still climbing,» said Ben Ayers, Nationwide senior economist. «Despite strong fundamentals for demand from demographics and a strong labor market, many first-time buyers are being shut out of the market by elevated financing rates and rising prices.»
MORTGAGE CALCULATOR: SEE HOW MUCH HIGHER RATES COULD COST YOU
Photo of a home for sale in Huntington, New York, on Aug. 5, 2020. (Photo by Thomas A. Ferrara/Newsday RM via Getty Images / Getty Images)
There are a number of driving forces behind the affordability crisis. Years of underbuilding fueled a shortage of homes in the country, a problem that was later exacerbated by the rapid rise in mortgage rates and expensive construction materials.
Higher mortgage rates over the past three years have created a «golden handcuff» effect in the housing market. Sellers who locked in a record-low mortgage rate of 3% or less during the pandemic began have been reluctant to sell, limiting supply further and leaving few options for eager would-be buyers.
WHY CAN'T YOU FIND A HOME FOR SALE?
Economists predict that mortgage rates will remain elevated for the first half of 2024 and that they will only begin to fall once the Federal
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