Elevated mortgage rates are cutting into homebuyers’ budgets. But this week’s inflation report—which shows that consumer prices are cooling quickly—provides a glimmer of hope that mortgage rates could gradually start to come down. The median U.S. home-sale price rose 1.5% from a year earlier during the four weeks ending July 9, the first increase in nearly five months. That’s according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Average weekly mortgage rates are at their highest level since November 2022, bringing the typical homebuyer’s monthly payment to a near-record-high of $2,627.
To look at the hit on affordability another way, a homebuyer on a $3,000 monthly budget can afford a $450,000 home with today’s average rate. That buyer has lost $30,000 in purchasing power since February, when they could have bought a $480,000 home with that month’s average rate of around 6%. The drop…