Record High: Redfin Reports Surge In Monthly Mortgage Payments

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Record High: Redfin Reports Surge In Monthly Mortgage Payments

Jun 8, 2023 | News | 0 comments

New data from Redfin reveals that the monthly mortgage payment for the average homebuyer has reached an all-time high of $2,614.

Based on Freddie Mac’s Primary Mortgage Market Survey, the average monthly expense for homeowners, considering a mortgage rate of 6.57% (the weekly average for a 30-year fixed mortgage ending on May 25), has increased by 0.18 percentage points compared to the previous week. This marks the largest weekly increase since February and is expected to dampen the already declining demand in the housing market. In fact, pending home sales across the country experienced a significant 17.4% annual drop in the four-week period ending May 21, which is the second-largest decline observed since January.

According to Redfin, sellers are showing signs of caution as new listings for sale have decreased by 24%, marking one of the largest declines since May 2020 when the COVID-19 pandemic began. The housing inventory remains historically low, resulting in demand still surpassing supply despite the existing challenges. In fact, the total number of homes available for sale has decreased by 0.9% compared to the same period in 2022, marking the first annualized decline in nearly a year.

However, Redfin pointed out that despite the challenges, numerous buyers remain actively involved in their home searches. Redfin’s Homebuyer Demand Index, which monitors home tour requests and other services provided by Redfin agents, has shown an increase compared to the previous week. Moreover, when compared to the previous year, the index has only experienced a minimal decline of 1%, marking the smallest annualized drop in the past year.

According to Heather Kruayai, a Redfin Premier agent based in Jacksonville, the current interest rate environment is causing buyers searching for moderately priced homes to step back. However, affluent buyers are still determined and committed to their home purchases.

In the meantime, Redfin indicates that a significant portion of buyers seems to remain engaged in the process of searching for homes, possibly adopting a strategy of waiting for mortgage rates to change. Redfin refers to this as a potential “burst of pent-up demand,” which could materialize if and when mortgage rates begin to decline.