Mortgage rates may fluctuate weekly but have remained high overall, currently at 6.75%. Home inventories are low, with prices increasing over 3% year-over-year into 2025 according to recent data. The Federal Reserve shows no intention of sharply decreasing rates, keeping mortgage costs tied to its decisions. The stark difference in payments between 3% and 7% interest significantly impacts affordability, with many potential buyers unable to enter the market due to high payment requirements. This situation has led to a housing market gridlock, stifling homeownership opportunities.
Home prices are likely to continue rising, as recent S&P CoreLogic data show that home prices have increased at over 3% year-over-year for all of 2025.
The Federal Reserve has not signaled that it will cut rates sharply, indicating mortgage rates are expected to remain high for an extended period.
With a monthly mortgage payment of $2,923 at a 7% interest rate, many Americans struggle given their post-tax income of roughly $5,000 per month.
The current housing market is in a state of gridlock, leading to diminished chances for Americans hoping to own homes.
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