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Prospective home buyers leave a property for sale during an Open House in a neighborhood in Clarksburg, Maryland on September 3, 2023. Roberto Schmidt | AFP | Getty Images It’s no secret that the housing market looks far different than it did a few years ago. While surging mortgage rates and housing prices have taken away consumers’ purchasing power, low supply has kept the market competitive. As a result, affordability has tumbled dramatically from the early days of the pandemic. These six charts help explain what this unique moment looks like — and what it means for you: The 30-year mortgage rate, a popular option for home buyers utilizing financing, is key to understanding the market. This rate is essentially the borrowing costs tied to purchasing a home with financing. A higher rate, in reality, results in more interest due on a home loan. For the past several months, this rate has hovered around the 7% level. While it has cooled after touching 8% late last year, it’s still far higher the sub-3% rates consumers could lock in during the first years of the pandemic. Housing prices are also central to the equation for everyday Americans decision how much, or if, they can afford to spend. The Case-Shiller national home price index, which is calculated by S&P Dow Jones Indices, has notched record highs this year. High prices can elicit different feelings by group. For hopeful homeowners, it can raise red flags that they are planning to buy at the wrong time. But current owners can see reason to celebrate, as it likely means their own property’s value has risen. With both mortgages and prices up, it’s not surprising that affordability is down compared with the early innings of the pandemic. There’s a few different readings of affordability painting a…

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Filed under: News - @ July 13, 2024 1:28 pm