Payments for new mortgages are soaring. That’s why home sales are slowing.
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One reason: The median monthly mortgage payment for a homebuyer in April soared to nearly $1,900, a 43% increase from one year ago, according to the Mortgage Bankers Association.
Fewer buyers can afford what’s on the market now, said Lawrence Yun at the National Association of Realtors.
“With the mortgage rate much higher compared to one year ago, even the homebuyers who really want to get into the market, they’re simply priced out,” he said.
Yun predicts that with less competition among buyers, home prices will start to moderate, and there will be fewer bidding wars.
One buyer who’s managed to navigate this fast-changing market is Jordan McCollough. He and his partner just closed on a four-bedroom house in Greensboro, North Carolina, for $415,000.
They bid $6,000 over asking price. McCollough said they thought they’d have to offer a lot more.
“We feel really lucky. We love the area, and things are still manageable such that you can still get your foot in the door on a property,” said McCollough.
They also got lucky on the mortgage — locking in a rate of just over 4% back in April. A month later, it would’ve been over 5%.
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