That’s how much more the average homebuyer’s monthly mortgage payment has risen just since the pandemic began—despite lower interest rates—as home prices have soared, new data shows.
Rapidly increasing home prices are putting more pressure on the budgets of homebuyers, a factor of increasing concern as interest rates brought to new record lows by the pandemic break out of their holding pattern, noticeably ticking up for the first time in months.
The size of the average 30-year mortgage rose to $410,300 last week, the highest since May and well above the $357,000 seen just before the pandemic began, Mortgage Bankers Association data showed Wednesday. Using MBA’s average interest rate then and now, (3.74% versus 3.10% as of last week,) that translates to an average monthly payment of $1,752 versus $1,650 pre-pandemic.
The low interest rates of the pandemic era have helped counterbalance the higher prices, but increases over the past week—mostly after MBA’s latest reading—are eating into the buying power of house hunters. For instance, if the average rate were still at its record low of 2.85%, by MBA’s measure, a $410,300 mortgage would cost homebuyers $1,697 a month. Conversely, if it had stayed at 3.74%, that same loan would cost $1,898 a month.
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