The national median mortgage payment rose in October, according to the Mortgage Bankers Association (MBA). (iStock)
The median mortgage payment in the United States rose in October, but at a slower pace than the previous month, according to the Mortgage Bankers Association (MBA).
In October, the national median mortgage payment rose 3.7% to $2,012, after rising 5.5% to $1,941. in Septembersaid the MBA’s Purchase Requisition Payment Index (PAPI).
“Potential buyers continued to feel the effects of October’s mortgage rate hike, with the 70 basis point rise in rates leading to the typical monthly mortgage payment hitting a new high of $2,012,” said Edward Seiler, vice president. -associate president of MBA. housing economics and the executive director of the Housing Research Institute of America, said.
These increases follow a three-month period over the summer when buying a home was more affordable, according to the MBA. The improved accessibility seen in August was likely caused by “slightly lower mortgage rates amid steady income growth,” Seiler said in September.
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High mortgage rates limit buyers’ purchasing power
Buying a home has become less affordable due to high mortgage rates, which, according to Seiler, “compress the purchasing power of potential buyers”.
In mid-September, mortgage rates have exceeded 6% for the first time since 2008. And at the end of October, mortgage rates hit 7.08% for the first time since April 2002. However, rates have since fallen falls below 7%.
The median loan amount in October fell to $295,000, which is “the lowest level since January 2021,” Seiler said.
“Weakening affordability and increasing economic uncertainty are expected to dampen home buying activity in the last two months of the year,” Seiler added.
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The housing market is developing positively
Last week, the average 30-year mortgage rate fell to 6.61%according Freddie Mac Core Mortgage Market Survey.
In light of the news, potential buyers could return to the market – but that may not be obvious until there is “more consistent evidence over time of a slowdown in the market.” inflation and a deeper and more steady decline in mortgage rates,” said Redfin deputy chief economist Taylor Marr. said in a statement.
“Pending sales and new listings may stop falling, but they shouldn’t see a major increase until there’s more certainty that the Fed’s efforts to rein in inflation are working,” he said. Marr said.
In November, the The Federal Reserve has raised interest rates again by 75 basis points with the aim of reducing inflation. This came after inflation has increased 7.7% per year in October, compared to 8.2% in September.
“Serious buyers who need to buy a home as soon as possible can feel good about jumping on a house this week, knowing it could cost them up to $100 less per month than the same house would have cost s They had signed the deal a week earlier,” Marr added. “More casual buyers may want to wait a few more months, as there is reason to be cautiously optimistic that the worst of inflation and high rates are behind us and monthly payments could fall further.”
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