In the current real estate market, homebuyers are increasingly feeling locked out due to skyrocketing prices and mortgage interest rates that are hitting new highs. This combination of factors leaves many potential buyers feeling frustrated and struggling to purchase a home.
Rising home prices are one of the primary concerns for homebuyers. In the current market, the median home price for single-family homes is up by 8.5 % from last year’s figure. This is the highest rate of appreciation seen in the last few years, further contributing to the affordability challenge.
Additionally, interest rates on 30-year mortgage loans have spiked significantly in 2021. Rates are now up to 3.05%, the highest they have ever been in the last nine months. This has caused the monthly payment on a typical mortgage to rise by 8% from the start of the year.
These two factors have combined to make it difficult for many potential buyers to afford a home. Those who are already feeling stretched to afford the median priced home are now finding that they cannot manage the additional amount required to cover mortgage payments. The prices may also increase further if mortgage rate continue to rise.
Ultimately, the current market is proving difficult for buyers who are feeling locked out due to high prices and rising mortgage rates. While the long-term economic outlook continues to look positive, potential buyers should be mindful that the market conditions may not be in their favour for much longer. In the meantime, buyers may want to consider seeking out cheaper housing options, such as mobile homes, which could provide a more affordable entry point into the housing market.