As the mortgage market waited on The Fed’s decision on the fed funds rate, there was virtually little change in the 30-year fixed rate. Rates remain stubbornly high for home buyers at 6.81% for the 30-year fixed. The mortgage rate translates into a monthly payment of $2,172 for the typical single-family home and $1,888 for the typical condo. While the condo monthly payment may be more attractive for first-time buyers, factoring in the holistic cost of the home, such as condo fees and commuting, is an important consideration.
Interest rates near 7% are not only a consideration for housing consumers’ budgets but also an acceptance of this rate. For now, this impacts who will want to sell their home and sweetens the opportunity for accidental landlords to hold onto current low-rate mortgages on existing units. Unfortunately, potential first-time buyers, minority buyers, and single buyers are all the ones who are struggling to enter the market.
