---
title: House Hunters Have Lost $71,000 in Buying Power Since Last Summer
description: A buyer with a $3,000 monthly budget can afford a $429,000 house compared to $500,000 a year ago due to mortgage rates and inventory issues.
authors:
  - name: Mary Ellen Cagnassola
    role: Reporter
    url: https://money.com/author/mary-ellen-cagnassola/
    bio: Mary Ellen (M.E.) Cagnassola is a former Money reporter who specialized in U.S. rent and real estate, with a focus on market trends and affordability.
    education: Rutgers University, BA Journalism
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published: '2023-08-25T19:22:22.000Z'
modified: '2024-01-10T15:09:00.000Z'
section: Housing
tags:
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![House Hunters Have Lost $71,000 in Buying Power Since Last Summer](https://img.money.com/2023/08/News-Homebuyers-Lost-71k-Buying-Power-Last-Year.jpg?quality=85&w=1012&h=569&crop=1)

Homebuyers’ purchasing power is rapidly slipping away as mortgage rates continue creeping up, according to a [new analysis](https://www.redfin.com/news/housing-market-update-high-mortgage-rates-buyers-lose-purchasing-power/). In fact, someone with a $3,000 monthly budget can now only afford a $429,000 home compared to a $500,000 one a year ago.

Historically high [mortgage rates](https://money.com/mortgage-rates/), rising prices and low inventory are making it especially difficult to purchase a home right now. The estimate, which comes from real estate brokerage Redfin, reflects a $71,000 loss in buying power since last August: yet another blow to long-suffering U.S. homebuyers, who have been dealing with unfavorable market circumstances since 2020.

It has been a rough few years for Americans trying to buy homes. Pandemic-induced migration and the ensuing homebuying frenzy pushed prices way up in 2020, resulting in [bidding wars](https://money.com/cities-with-most-bidding-wars-homes/) between buyers who could still afford to compete for property. Just as the market started showing signs of [cooling](https://money.com/housing-market-cooldown-bidding-wars/) in summer 2022, the Federal Reserve’s inflation-busting rate hikes pushed even more buyers out of the market as homeowners locked into their current mortgages.

High [mortgage rates](https://money.com/mortgage-rate-makes-homeowners-sell/) have edged [home sellers](https://money.com/homes-changed-ownership-2023/) out of the market, too, creating an even greater imbalance between supply and demand. Now, buyers are contending with a nightmare trio of historically high monthly mortgage payments, historically high prices and historically low inventory as sellers retreat.

It looks like it will be a while until conditions improve, according to another analysis. Per recent reports from real estate marketplace Zillow, the typical home is now valued at almost $350,000, and [values are expected to grow 6.5%](https://money.com/home-values-zillow-prediction-2024/) over the next year.

While that’s good news for current homeowners’ [equity](https://money.com/home-equity-sharing-pros-cons/), it’s another hit to affordability that will likely continue to keep prospective buyers on the sidelines.

[The Top 10 Cities Attracting Out-of-Town Homebuyers Right Now](https://money.com/cities-out-of-town-homebuyers/)

[Foreclosures Are on the Rise in These 10 U.S. Cities](https://money.com/home-foreclosures-rise-cities/)

[Zillow and Other Rental Sites Are Now Disclosing Sneaky 'Junk Fees' Upfront](https://money.com/zillow-rental-sites-junk-fees/)

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