The average homeowner with a near record-low mortgage rate would see their monthly payment shoot up 132%, or roughly $1,800, in order to move up to a 25% more expensive home.Higher mortgage rates usually cool both prices and demand, as they did last year, but that's not the case now. There are still too few homes for sale because current homeowners can't afford to move, and it's keeping prices high.
But sales of newly built homes, which are counted by contracts signed during the month, were nearly 6% higher in February year over year. Pending sales of existing homes, also based on signed contracts, were down 7% that month from the year before, but not for lack of demand.The real trouble in today's existing home market is lack of supply. There are more new listings this Spring than last, but supply is still 40% below where it was pre-pandemic.
In stark contrast today, the average homeowner with a near record-low mortgage rate would see their monthly payment shoot up 132%, or roughly $1,800, in order to move up to a 25% more expensive home. Buying the same home they're in now would increase their monthly payment by 60%, according to ICE. If rates fell to 5%, moving up would require a 68% larger payment, still much higher than the long-run average of 39%, but perhaps enough to motivate someone with a compelling need or desire to upgrade.