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The average home price was down 2% (-$8.8K) from its June peak but remains 12.1% higher than this time a year ago when the housing boom was still going strong. Despite price pullbacks, the housing market remains unaffordable for many.
With rates at 6.7% as of Sept. 29, it takes 38.2% of the median household income to make the monthly mortgage payment on the median-priced home bought with a 30-year mortgage and 20% down. That monthly payment was up by 73%, or $930, from last year.
Read more: US mortgage rates break new barrier as downturn risk grows
“Historically low inventory – along with record low-interest rates – was one of the key drivers behind US home prices seeing essentially a decade’s worth of appreciation in just two-and-a-half years,” Graboske said.
“Housing market participants have reached an impasse, and surging mortgage rates are the culprit,” added CoreLogic deputy chief economist Selma Hepp. “Many buyers moved to the sidelines as the cost of homeownership became prohibitively high, while sellers were unwilling to give up locked-in record low rates and expectations of the peak sales price. As a result, home price growth continues to decelerate from April’s 20% peak and is anticipated to reach half of April’s rate by December. Home price deceleration and seasonal price decline in some markets will provide opportunities for potential buyers who are now facing lessened competition than earlier this year.”
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