Monthly home payments set new record in March

by Liz Hughes

Monthly home payments hit new records last month reaching an all-time high of $2,747, an 11% increase from last year, according to a new Redfin report. 

Redfin attributed the rise in housing payments to increasing home prices and continued high mortgage rates. Prices are staying stubbornly high because homebuyer demand continues to outweigh inventory levels – a situation the market continues to bear. 

During the four weeks ended April 7, the median home sale price rose 4.5% from last year, approximately $5,000 short of the record high reached in June 2022.

Meanwhile, the typical 30-year fixed mortgage rate was 6.82%, lower than last October’s nearly 8% rates but still more than twice the lows seen during the pandemic.

According to Redfin’s Homebuyer Demand Index, requests for tours and services from Redfin agents are at their highest level since last July. It also shows that tours have increased 33% since the beginning of the year. 

However, despite the increase in supply, with a 14% rise in new listings compared to last year in April, inventory remains low compared to a typical spring market. This once again translates to high competition for available homes.

The report also noted elevated mortgage rates continue to drive up monthly housing payments. In April, the daily average mortgage rate reached its highest level since November, something Redfin attributed to the “hotter than expected” March inflation report. 

Chen Zhao, Redfin economic research lead said for homebuyers, the latest Consumer Price Index report means “mortgage rates will stay higher for longer because it makes the Fed unlikely to cut interest rates in the next few months. 

“Housing costs are likely to continue going up for the near future, but persistently high mortgage rates and rising supply could cool home-price growth by the end of the year, taking some pressure off costs,” Zhao said.

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