The monthly mortgage payment on the typical single-family home is now $1,059, according to new third-quarter data from the National Association of Realtors. Up $27 from last year, the increase comes as the NAR’s most recent quarterly price report shows home prices up in every measured metro area. In fact, more than half of the included cities had double-digit increases and all four major regions were up year-over-year.
Lawrence Yun, NAR’s chief economist, says rising prices are going to affect affordability conditions, regardless of how low mortgage rates go. “Favorable mortgage rates will continue to bring fresh buyers to the market,” Yun said. “However, the affordability situation will not improve even with low interest rates because housing prices are increasing much too fast.”
But why are prices rising? Well, part of it is too few homes for sale. The pandemic caused already low inventory to fall further. And too few available homes, combined with elevated buyer demand, has caused more competition and bidding wars, which push prices higher. (source)