With mortgage rates soaring, the typical homebuyer’s monthly mortgage payment has also reached a new high of $2,123, according to a report from Redfin for the four-week period ending March 13. That’s over $530 more than the typical pre-pandemic homebuyer is paying. Pending sales climbed 3% year over year, despite new listings shrinking at the same rate.
The average monthly mortgage payment was up 25% from a year earlier, when mortgage rates were 3.09%, and up 34% from the same period in 2020, when rates were 3.65%. Also, mortgage purchase applications increased 1% week over week (seasonally adjusted) during the week ending March 11, according to Redfin.
The rise in mortgage rates has done nothing to cool the housing market. The U.S. median home sale price surged 7% during the four-week period ending March 13, according to a new report from Redfin.
“There are plenty of reasons to be worried about the economy, but demand for housing has so far remained strong,” Redfin Chief Economist Daryl Fairweather said in a statement. “Consumers continue to spend on housing even though gas prices are on the rise and supply-chain interruptions may lead to even more inflation. Homebuyers are betting that even as the economy twists and turns, owning a home will be a worthwhile investment. As mortgage rates continue to shoot up from historic lows at an unprecedented pace, they could prove to be the one force that can slow homebuying demand in the spring.”
Not surprisingly, Redfin also found that over two-thirds of its agents found themselves in bidding wars in February. February’s bidding war rate is up slightly from a revised rate of 68% in January and 60.2% a year earlier. On an unadjusted basis, February’s bidding-war rate was 71.4%.
The median home sale price was up 17% year over year to a record high of $376,350, and up 36% from the same time in 2020.
Three-quarters (75.3%) of Redfin offers for townhouses faced competition in February—a higher share than any other property type. Next came single-family homes, with a bidding-war rate of 72.9%. Multi-family properties and condos/co-ops essentially tied for third place, with respective rates of 64.8% and 64.6%. Redfin says many homebuyers have sought out townhouses because they’ve been priced out of the market for single-family homes due to surging housing prices.
Homes listed in the $1 million to $1.5 million range were the most likely to face competition, with a bidding-war rate of 76.6% in February. Next came homes in the $600,000 to $800,000 range (73.8%), followed by homes listed for more than $1.5 million (73.1%).
El Paso, Texas, had the highest bidding-war rate of the 50 U.S. metropolitan areas in this analysis, with 87.5% of offers written by Redfin agents facing competition in February. Next came Denver at 83% and Minneapolis at 81.1%. Raleigh, N.C. and San Francisco/San Jose rounded out the top five, with bidding-war rates of 80% and 79.9%, respectively.
