Housing Market Update: Typical Buyer’s Monthly Payment Up 39%—The Biggest Annual Gain on Record

Home sellers and buyers are retreating at similar rates, resulting in a housing market that remains very competitive even as it slows.

The typical homebuyer’s monthly mortgage payment shot up 39%, the largest year-over-year gain on record as the average 30-year-fixed rate hovered at a 12-year high of 5.1%. Redfin’s data on homebuyer mortgage payments is based on asking-price data going back to 2015.

“Rising mortgage rates are taking a bite out of pending sales as both buyers and sellers take a step back from the turbulent market,” said Redfin Chief Economist Daryl Fairweather. “It seems as though the ratio of buyers to sellers remains mostly the same, which is why we have yet to see a substantial drop in bidding wars or the share of homes selling quickly. It’s still early days though when it comes to 5% mortgage rates. The number of buyers willing to pay such high mortgage payments could evaporate by late summer.”

Pending home sales posted their largest year-over-year decrease since mid-February and mortgage purchase applications fell 17%. On the supply side, new listings fell 4% and the share of listings with price drops rose to its highest level since November.

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