Market Watch

• A few years ago, a buyer purchasing a $400,000 home with a 15% down payment and a 30-year mortgage at 3% — a common pandemic-era rate — would pay about $2,000 per month, while today’s nearly 7% rate would raise the payment to nearly $2,800.
• Federal Reserve Chair Jerome Powell emphasized that the housing affordability crisis stems from a long-term housing shortage, not interest rates, and noted that the Fed cannot solve the lack of housing supply.
• Despite home sales running at their slowest pace in 30 years, prices continue to set records, with the median price of an existing home sold in June reaching $435,300.
• Zillow reports that for a typical home to be affordable to a median-income family, the 30-year mortgage rate would need to drop to an “unrealistic” 4.43% or home values would need to fall by 18%.
• Two new bills in Congress aim to address affordability, with one proposing the elimination of capital-gains taxes on home sales and another seeking to boost new-home construction by reducing regulatory barriers.
• The Mortgage Bankers Association says that if the Fed achieves long-term price stability and maximum employment, it will lead to lower and more stable mortgage rates, benefiting housing affordability.