Zillow Analyzes Lower Mortgage Rates and Their Impact on Increasing Regional Homebuying Power
On Thursday (2-9-23), Zillow Group Inc. released its latest Zillow® analysis on mortgage rates and buying power. According to the report, in recent months home buyers’ mortgage payments have started to allow them to get more home for their money.
Zillow points out that as mortgage rates doubled last year, the home price afforded by a $3,000 monthly mortgage payment fell from $865,000 in January 2022, to a low of $560,000 in October 2022. And that of course dramatically changed the size and price of homes within a buyer’s reach. Today, on average, the same $3,000 monthly payment purchases a home 140 square feet smaller than a home purchased a year ago.
However, rates have dropped from their peak of just above 7%, and as a result, buyers are getting larger homes with higher price tags at a fixed monthly cost. The Zillow analysis shows that a typical home associated with a $3,000 monthly mortgage payment is up $60,000 in value since October, and the home size has recovered 84 square feet previously lost. Zillow believes these developments bode well for the upcoming springtime homebuying season.
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