The purchasing power of prospective homebuyers has eroded because of the recent increase in mortgage rates, with strong economic data also contributing to the problem, according to real estate brokerage firm Redfin.
Homebuyers have lost $33,250 in purchasing power over the past six weeks, said an Oct. 29 statement by the firm. “A homebuyer on a $3,000 monthly budget can afford a $442,500 home with the current 7 percent mortgage rate,” the brokerage noted. “The same homebuyer could have purchased a $475,750 home with a 6.11 percent rate—the average on September 17.”
“That buyer still has $17,000 more purchasing power than they would have had in April, when mortgage rates peaked at 7.5 percent. But the recent rise in mortgage rates is disappointing for buyers who missed out on the short window of rates that were much closer to 6 percent than 7 percent.”…