Monthly mortgage payments on median-priced homes have doubled to $2,000 since 2019, deterring sales and limiting inventory.
U.S. housing market activity has stalled as mortgage rates near 6.5% erase affordability gains from a brief February dip below 6%. Monthly carrying costs for a median-priced home now reach roughly $2,000, nearly double the expense five years ago, according to new research.
Existing-home sales remain stuck at 4.06 million annually, the lowest level since 1995, as 70% of homeowners hold mortgage rates under 5%. Half of these owners pay less than 4%, creating a disincentive to sell and refinance at current rates. The trend shows no signs of reversing in 2024 or 2025.
Analysts highlight the widening gap between staying in a low-rate mortgage and trading up. A homeowner who refinanced during the pandemic now spends less than 8% of income on housing, compared to the burden of a new 6.5% loan.