The Cost of Buying a House Reaches a New Record High

A spike in mortgage rates — plus high prices in the current spring market — pushed the cost of a home purchase up to a new all-time high.

The median monthly payment for a home climbed to $2,775, which is a record high and an 11% increase from a year ago, according to Redfin.

Current mortgage rates are a big reason why costs are so high for homebuyers now. Mortgage rates closely depend on the Fed’s benchmark rates and expectations about where they’re headed. When inflation numbers came in hot last week, it pushed back expectations about when the Federal Reserve will cut interest rates.

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The information on the daily averages includes financial product data that was in the MRC database at the time of publication. The assumptions used to calculate the rates are as follows: Rates are based on a $315,000 for conforming loans and $850,000 for non-conforming loans of an owner occupied, single-family residence with an 80% loan-to-value ratio, and rate lock ranging from 30 to 60 days. Rates are available for consumers for fico levels starting at 620 and up to 850. Rates are subject to change without notice. Quotes are for "no-cash-out" loans. All quotes are for products or loans that can be sold on the secondary market with no prepayment penalties nor negative amortization. Home Equity: The information on the daily averages includes financial product data that was in the Curinos database at the time of publication. Home Equity Loans - Rates are based on a fixed rate home equity loan for an owner-occupied residence, second lien, 15-year or 10- year repayment terms with an 80% loan-to-value ratio, Fico range of 740 and above, with a maximum loan amount of $50,000.00 . Home Equity Line of Credit - Rates are based on a variable rate, second lien revolving home equity line of credit for an owner-occupied residence with an 80% loan-to-value ratio, Fico range of 740 and above with a maximum line of credit of $50,000.00. Contact mediasupport@mortgageresearchcenter.com to have your rates included in this chart.

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Bank of America, for example, now only expects one interest rate cut this year — and not until December. And on Tuesday, Fed Chair Jerome Powell confirmed that it will “likely to take longer” to reach the appropriate time to cut, considering the recent data.

It was the opposite of what potential homebuyers wanted to hear. These developments contributed to a one-week jump in mortgage rates of nearly a quarter of a percentage point.

Housing costs jump as mortgage rates exceed 7%

According to Freddie Mac, the rate on a 30-year fixed-rate loan averaged 7.10% for the week ending April 18, which is the highest average so far this year. (Redfin’s analysis is based on different mortgage data that places the average at 7.4%.)

Despite high mortgage rates, home prices are still climbing. The median sale price over the past four weeks was $380,250, which is 5% higher than the median at the same time last year, according to Redfin.

The National Association of Realtors (NAR) similarly reports that existing-home sale prices are up 4.8% in the past year. Even as the inventory of homes for sale increased nearly 5% from February to March, “the increased competition among sellers didn’t appear to hurt home prices,” the NAR said in a report.

In a separate analysis of the NAR's latest data, Orphe Divounguy, senior economist at Zillow, explained that sellers are coming off the sidelines this spring home-buying season, but “buyers — faced with a sharp increase in mortgage rates at the start of the year — have been slower to return.”

The good news: As home inventories rise amid lower buyer demand, house hunters should start to see some price cuts soon, Divounguy adds.

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