That may have already started to happen in some places. While sale prices were down 4.5 percent in the Northeast and 5.6 percent in the West in February from a year earlier, according to the National Association of Realtors, they were up 5 percent in the Midwest and 2.7 percent in the South. The median sale price in Manhattan may have fallen 7 percent in February 2023, to $1.06 million, compared to the same time year ago, according to data compiled by Miller Samuel, but in Orlando, Fla., prices were up almost 4 percent, to a median of $358,000. In other cities, like Houston, prices remained virtually flat, falling less than 1 percent, to a median of $302,250, during the same period, according to Miller Samuel.
But even without a price increase, buying a house today is more expensive than it was a year ago, and considerably more expensive than it was before home prices rose at their fastest pace in history during the first part of the pandemic.
Buy a median-price home today, with a 20 percent down payment on a 30-year loan, and you’ll pay $1,808 a month in principal and interest, 23 percent more a month than you would have paid if you bought the same home a year ago, when the median sale price was $367,225 and interest rates were 4.42%.
If that depresses you, are you sitting down? That house you bought today will cost you 84 percent more a month to own than it would have if you bought it in March 2019, when the median price was $255,875, interest rates were 4.06 percent, and your monthly payments would have been a humble $984.
A buyer’s only reply, it would seem, is a drop in interest rates. But how likely is that? Bob Walters, the chief executive of Rocket Mortgage, predicts that mortgage rates will remain stable, or maybe slip a little in the months ahead, barring “an unwelcome inflation report.”