Recent Reversal in Housing Market and Impact of Rising Mortgage Rates

The housing market experienced a recent reversal as mortgage rates rose rapidly, reaching over seven percent nationally. This rise in rates was triggered by the latest inflation report, leading to the highest monthly payment on record for new home buyers, nearly $2,800. Additionally, home prices surged with the median sale price exceeding $390,000, the highest ever recorded for March. Housing affordability has worsened significantly, with a 30% increase in prices since the start of 2020. This rise in rates and prices has trapped many homeowners who purchased homes at lower rates, now reluctant to give up low rates for higher ones. Consequently, housing inventory remains low due to this conundrum, impacting millions of households.