Ballooning mortgage costs, driven by skyrocketing prices and interest rates, have made mortgages less affordable than at any time since at least 2007. Demand for homes has pulled back in response, easing price growth, slowing sales and boosting inventory, according to Zillow.
Mortgage rates have shot up in early June, averaging 5.78 percent. A new purchase of a typical U.S. home at that rate would mean monthly mortgage payments of $2,127. That’s 51 percent higher than a year ago and up 36 percent year-to-date.
“Mortgage rates took an unprecedented leap skyward over the past two weeks and quickly multiplied housing costs as they rose,” said Nicole Bachaud, Zillow economist. “We are already seeing signs of waning demand and expect these recent rate hikes to quicken the market’s needed rebalancing. While shoppers will likely experience less competition for homes than the frenzied recent months, their purchasing power has dwindled.”
Incomes are lagging f