by Calculated Risk on 3/15/2023 12:14:00 PM
Today, in the Calculated Risk Real Estate Newsletter: Current State of the Housing Market; Overview for mid-March
A brief excerpt:
A year ago, the payment on a $500,000 house, with a 20% down payment and 3.76% 30-year mortgage rates, would be around $1,855 for principal and interest. The monthly payment for the same house, with house prices up 3% YoY and mortgage rates at 6.75%, would be $2,672 – an increase of 44%! Monthly payments are still up sharply year-over-year.
There are always some people that need to sell; death, divorce, moving for employment are a few reasons. However, homeowners with a low mortgage rate will be reluctant to sell, and then buy a new home, when their monthly payment will be much higher for the new home. The sharp increase in mortgage rates is probably the key reason new listings have declined sharply year-over-year.
This is very different from the housing bust, when many homeowners were forced to sell as their teaser rates expired and they could not afford the fully amortized mortgage payment. The current situation is similar to the 1980 period, when rates increased quickly.
There is much more in the article. You can subscribe at https://calculatedrisk.substack.com/