Lower mortgage rates empower homebuyers with increased purchasing power

Posted on February 5, 2024   |  

Homebuyers with a $3,000 monthly budget now have around $40,000 more purchasing power since mortgage rates peaked last fall.

At the current average 6.7% mortgage rate, a $3,000 monthly budget allows the purchase of a $453,000 home, compared to a $416,000 home possible in October 2023 with a 7.8% mortgage rate.

Looking at affordability, the monthly mortgage payment for the typical US home, valued at approximately $363,000, is $2,545 at a 6.7% mortgage rate. 

This is almost $200 lower than the monthly payment when rates were 7.8%, which was $2,713.