Monthly Housing Payments Hit All-Time High, Home Affordability Affected

Affordability worsened in 97 percent of counties in the first quarter.

A home for sale in Arlington, Va., on Aug. 22, 2023. Andrew Caballero-Reynolds/AFP via Getty Images

Americans now have to spend more money when buying homes as elevated property prices and mortgage rates have pushed up monthly payments to new highs, according to real estate brokerage Redfin.

“The typical U.S. homebuyer’s monthly housing payment hit an all-time high of $2,807 during the four weeks ending March 23, up 5.3 [percent] from a year earlier,” the company said in a March 27 statement. With monthly payments at historical highs in many counties across the country, home affordability has taken a hit.

“Housing costs are soaring for two reasons,“ Redfin stated. ”One, sale prices keep rising; the median home sale price is up 3 [percent] year over year. Two, the average weekly mortgage rate is 6.67 [percent]—more than double pandemic-era lows.”

While rates remain elevated, they have dropped over the past several weeks—coming down from a peak of 7.04 percent in mid-January—offering some respite for prospective buyers.

The fact that rates have remained below 7 percent for multiple weeks has been “helpful for potential buyers and sellers alike,” Sam Khater, Freddie Mac chief economist, said.

“Recent mortgage rate stability continues to benefit potential buyers this spring,” he said.

While high costs are putting off certain buyers, some are “stepping off the sidelines,” Redfin said, adding that mortgage applications to buy homes are at the highest level since the beginning of February.

Redfin agents are reporting that certain buyers are able to negotiate transactions in their favor despite high home prices.

“Buyers are cautious because they’re worried about the economy and potential layoffs, and they’re wondering if mortgage rates will come down later this year. But because other buyers are cautious, too, some house hunters are getting homes for under asking price,” Kimberly Freutel, a Redfin Premier agent in Sammamish, Washington, said.

“If you love a home and you see yourself living there for at least four or five years, make an offer you’re comfortable with, even if it’s a little below list. Don’t assume it will escalate out of your price range, because the seller might actually take it.”

According to Redfin, sellers are now entering the market at a faster pace, thus boosting listings of homes for sale. If this trend continues and mortgage rates decline, pending sales could receive a boost over the next months, the brokerage said.

Affordability Worsens

A recent report from real estate analytics company ATTOM stated that home ownership remains a “financial stretch” in the United States.

Median-priced single-family homes and condos were found to be less affordable during the first quarter of 2025, compared with “historical averages in 97 percent of counties around the nation.”

Almost one-third of the average national wage was consumed by expenses on median-priced homes, higher than the 28 percent level typically preferred by lenders.

“Home affordability is in a holding pattern this quarter—financially stressful for average wage earners but not changing much. This is not unusual during the Winter lull when home prices level out,” ATTOM CEO Rob Barber said.

“A recent small decline in mortgage rates surely hasn’t hurt either for fledgling buyers.

“If history is a good guide, prices will rise as we head into the peak buying season that’s about to start, which will worsen affordability measures.”

Expenses on homes have outpaced or declined less than wages in 14 out of the past 16 quarters, according to the report.

The most populated counties that are highly unaffordable include Los Angeles, San Diego, and Orange counties in California; Maricopa County in Arizona; and Miami-Dade County in Florida.

In a March 27 commentary, Lisa Sturtevant, chief economist at real estate data company Bright MLS, said that even a half-point decline in mortgage rates would boost affordability for homebuyers by reducing monthly payments by roughly $120.

“Even though rates are only slightly lower than they were a year ago, buyers do have some leverage heading into the spring market,” she said.

“With more inventory on the market, more sellers are dropping their asking prices and are less likely to receive multiple offers. Sellers are also more willing to negotiate with buyers on concessions like cash for repairs or closing cost assistance.”