US Home Prices Decline, but Mortgage Payments Hit All-Time High

Redfin on Thursday (4-20-23) reported that the average US homebuyer’s monthly housing payment hit an all-time high of $2,538 as the average weekly mortgage rate increased to 6.39%, following five consecutive weeks of declines. The new high comes in spite of the median home-sale price dropping 2.6% from a year earlier during the four weeks ending April 16th, the biggest decline in over a decade.

Redfin notes that elevated housing costs are one reason would-be homebuyers are backing away from the market. Redfin points to the fact that pending home sales are down 19% year-over-year—which is the largest drop in nearly three months—and mortgage-purchase applications declined 10% over the previous week. Buyers are also limited by the shortage of homes for sale, with new listings down 21% as homeowners with comparatively lower mortgage rates choose to stay in their current homes.

Adding additional background and his analysis to the report, Redfin’s Deputy Chief Economist Taylor Marr said:

“Homebuyers are window shopping, and many are entering the store, but few of them are making it to the cash register yet. There’s not much on the shelves to choose from, and high mortgage rates and still-high prices are making homes too expensive for many buyers. Some buyers are discouraged by mortgage rates rising this week, which is partly due to stronger-than-expected bank earnings making it more likely the Fed will hike interest rates next month.”