A new report shows the cost of a 30-year mortgage on the typical U.S. home is now 19.5% higher than it was just three months ago, according to the March Zillow® Real Estate Market Report released last week. Despite this, the pace and volume of sales picked up in March, showing the depth of the pool of homebuyers willing and able to meet current asking prices.
Key findings from the report:
- Monthly mortgage payments on the typical U.S. home are 19.5% higher than they were three months ago, and 38% higher than a year ago.
- Annual home-value growth set a record for the 12th month in a row. The typical U.S. home is worth $337,560, up 20.6% from a year ago.
- Buyers remain ready to pounce on any inventory that hits the market. For-sale inventory and newly pending sales each grew 11.6% from the month prior, and typical time on the market decreased two days from February.
- Rising home values and mortgage rates have pushed the monthly payment on the typical U.S. home 38% higher than it would have been a year ago, assuming a 30-year mortgage with a 20% down payment.
- After six consecutive months of dwindling inventory—a streak that lasted longer into the year than is typical—11.6% more homes were available in March than in February, the largest one-month jump in Zillow’s records.
- Still, inventory is 22.5% lower than it was a year ago, and the roughly 754,000 homes that were on the market in March represent a figure lower than in any month on record before January 2022.
- The number of newly listed homes in March jumped 35.8% from February to about 386,000, but that remains 8.5% lower than last March’s pace of new listings.
- Newly pending sales rose 11.6% in March from February—the exact same increase as inventory—demonstrating that demand is still outstripping supply, even with higher mortgage rates.
- The speed of sales also picked up in March, accelerating to nine days for the typical sale, down from 11 in February.
The takeaway:
“Higher mortgage rates were anticipated this year, but the speed of their rise has been breathtaking,” said Jeff Tucker, Zillow senior economist. “Record low mortgage rates had been an affordability lifeline during the pandemic, keeping monthly payments in check even while prices climbed quickly. March was the biggest test yet of whether enough buyers can meet the new asking prices to keep home values growing at a record pace, and the answer was ‘So far, yes.’ There will be a point when the cost of buying a home deters enough buyers to bring price growth back down to Earth, but for now, there is plenty of fuel in the tank as home shopping season kicks into gear.”
To view the full report, click here.
