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The cost of a mortgage is up 20% since December

The cost of a mortgage is up 20% since December


Higher mortgage rates are compounding affordability challenges for home shoppers, but the market continues to move at a remarkable pace

  • Monthly mortgage payments on the typical U.S. home are 19.5% higher than they were three months ago, and 38% higher than a year ago.
  • Annual home value growth set a record for the 12th month in a row. The typical U.S. home is worth $337,560, up 20.6% from a year ago.
  • Buyers remain ready to pounce on any inventory that hits the market. For-sale inventory and newly pending sales each grew 11.6% from the month prior, and typical time on the market decreased two days from February.

SEATTLE, April 20, 2022 /PRNewswire/ — Home shoppers are facing a one-two punch this spring: Quickly rising mortgage rates are compounding affordability challenges that have been brought on by record home value growth. The cost of a 30-year mortgage on the typical U.S. home is now 19.5% higher than it was just three months ago, according to the March Zillow® Real Estate Market Report.i Despite this, the pace and volume of sales picked up in March, showing the depth of the pool of home buyers willing and able to meet current asking prices. 

The typical U.S. home is worth 20.6% more than it was a year ago, the 12th straight month in which a new record for annual home value growth has been set. Mortgage rates, which were below 3% a year ago, entered March at 3.51% and rose as high as 4.54% during the month.ii Combined, rising home values and mortgage rates have pushed the monthly payment on the typical U.S. home 38% higher than it would have been a year ago, assuming a 30-year mortgage with a 20% down payment.

“Higher mortgage rates were anticipated this year, but the speed of their rise has been breathtaking,” said Jeff Tucker, Zillow senior economist. “Record low mortgage rates had been an affordability lifeline during the pandemic, keeping monthly payments in check even while prices climbed quickly. March was the biggest test yet of whether enough buyers can meet the new asking prices to keep home values growing at a record pace, and the answer was ‘So far, yes.’ There will be a point when the cost of buying a home deters enough buyers to bring price growth back down to Earth, but for now, there is plenty of fuel in the tank as home shopping season kicks into gear.”

One bright spot for home shoppers is that the long-awaited seasonal inventory boost finally came in March. After six consecutive months of dwindling inventory — a streak that lasted longer into the year than is typical — 11.6% more homes were available in March than in February, the largest one-month jump in Zillow’s records.iii

Still, inventory is 22.5% lower than it was a year ago, and the roughly 754,000 homes that were on the market in March represent a figure lower than in any month on record before January 2022. The number of newly listed homes in March jumped 35.8% from February to about 386,000, but that remains 8.5% lower than last March’s pace of new listings.

Buyers proved they remain ready to gobble up any inventory that comes their way. Newly pending sales rose 11.6% in March from February — the exact same increase as inventory — demonstrating that demand is still outstripping supply, even with higher mortgage rates. The speed of sales also picked up in March, accelerating to nine days for the typical sale, down from 11 in February. 

Zillow’s home value forecast now calls for 14.9% growth through March 2023, down from a year-ahead forecast of 16.5% growth made in February. Zillow’s existing home sales forecast has been lowered as well, to 6.09 million sales in 2022, which would mark a slight decline of 0.5% from 2021. Affordability headwinds — led by sharp mortgage rate increases — have strengthened faster than expected, but these figures still represent a remarkably competitive housing market in the coming year. Annual home value growth of 14.9% would have been the highest ever recorded by Zillow before June 2021, and 6.09 million existing home sales would mark the second-best calendar year total since 2006.

Rents may have hit a turning point. The typical U.S. rent grew 16.8% year over year to $1,904. That’s down from 17.2% annual growth in February, marking the first slowdown in annual rent growth since February 2021. The rapid rise in rent prices over the past year has stretched affordability in much of the country and made it harder for potential first-time buyers to save for a down payment.

Metropolitan
Area*

Zillow
Home
Value
Index
(ZHVI)

ZHVI
YoY
Change

Monthly
Mortgage
Payment
on a
Typical
Home**

Monthly
Mortgage
Payment
on a
Typical
Home
YoY
Change

Inventory
MoM
Change

Inventory
YoY
Change

Zillow
Observed
Rent
Index
(ZORI)

ZORI
YoY
Change

United States

$337,560

20.6%

$1,316

38.0%

11.6%

-22.5%

$1,904

16.8%

New York, NY

$590,839

12.4%

$2,304

28.6%

12.9%

-26.8%

$2,934

20.2%

Los Angeles, CA

$911,892

20.1%

$3,556

37.4%

14.6%

-26.0%

$2,853

15.7%

Chicago, IL

$300,651

14.3%

$1,172

30.7%

14.9%

-26.1%

$1,842

12.0%

Dallas–Fort Worth, TX

$370,501

29.3%

$1,445

48.0%

13.9%

-25.1%

$1,709

18.2%

Philadelphia, PA

$322,475

13.8%

$1,257

30.1%

12.6%

-16.1%

$1,775

12.1%

Houston, TX

$293,387

21.3%

$1,144

38.8%

1.7%

-28.0%

$1,527

12.9%

Washington, D.C.

$543,698

11.4%

$2,120

27.4%

21.1%

-18.3%

$2,127

12.4%

Miami–Fort
Lauderdale, FL

$422,639

26.3%

$1,648

44.5%

1.5%

-44.7%

$2,832

32.6%

Atlanta, GA

$360,679

30.0%

$1,406

48.7%

8.6%

-28.2%

$1,886

19.2%

Boston, MA

$635,813

14.6%

$2,479

31.1%

44.3%

-30.9%

$2,725

11.9%

San Francisco, CA

$1,461,773

20.1%

$5,700

37.4%

26.3%

-9.1%

$3,118

11.2%

Detroit, MI

$234,015

15.1%

$912

31.7%

14.0%

-10.3%

$1,372

10.5%

Riverside, CA

$568,579

28.2%

$2,217

46.7%

11.5%

-1.3%

$2,561

18.0%

Phoenix, AZ

$453,110

30.2%

$1,767

48.9%

6.4%

-9.0%

$1,921

23.7%

Seattle, WA

$771,631

24.8%

$3,009

42.8%

37.5%

-17.7%

$2,151

17.1%

Minneapolis
–St. Paul, MN

$369,107

12.3%

$1,439

28.4%

16.7%

-15.7%

$1,610

7.0%

San Diego, CA

$902,655

27.8%

$3,520

46.2%

17.9%

-19.0%

$2,840

19.5%

St. Louis, MO

$235,436

15.4%

$918

32.0%

20.1%

-23.0%

$1,232

11.4%

Tampa, FL

$352,962

33.1%

$1,376

52.3%

10.2%

-20.6%

$2,029

28.1%

Baltimore, MD

$366,129

11.6%

$1,428

27.6%

18.3%

-9.3%

$1,764

11.6%

Denver, CO

$627,072

24.3%

$2,445

42.2%

30.5%

-4.6%

$1,905

15.7%

Pittsburgh, PA

$209,200

14.3%

$816

30.8%

11.7%

-11.9%

$1,333

8.9%

Portland, OR

$569,065

19.2%

$2,219

36.4%

21.2%

-15.6%

$1,804

13.0%

Charlotte, NC

$362,509

29.6%

$1,413

48.2%

9.2%

-29.9%

$1,724

17.9%

Sacramento, CA

$605,595

22.3%

$2,361

39.8%

19.1%

-1.4%

$2,236

12.8%

San Antonio, TX

$322,243

24.9%

$1,256

42.8%

-0.4%

-30.0%

$1,417

15.7%

Orlando, FL

$364,611

29.1%

$1,422

47.7%

6.1%

-30.9%

$1,951

24.7%

Cincinnati, OH

$250,986

15.4%

$979

32.0%

15.6%

-15.7%

$1,443

10.7%

Cleveland, OH

$208,407

15.6%

$813

32.3%

16.7%

-12.4%

$1,287

9.7%

Kansas City, MO

$278,453

16.9%

$1,086

33.8%

15.2%

-9.1%

$1,277

11.2%

Las Vegas, NV

$427,786

32.4%

$1,668

51.5%

7.5%

-13.2%

$1,828

22.7%

Columbus, OH

$284,813

16.7%

$1,111

33.5%

15.1%

-18.4%

$1,387

10.4%

Indianapolis, IN

$259,032

20.4%

$1,010

37.7%

12.3%

-14.0%

$1,427

13.1%

San Jose, CA

$1,674,427

23.9%

$6,529

41.8%

33.6%

-16.9%

$3,133

11.7%

Austin, TX

$589,627

42.7%

$2,299

63.2%

17.1%

-11.8%

$1,808

21.6%

Virginia Beach, VA

$314,133

14.8%

$1,225

31.3%

12.9%

-19.1%

$1,575

12.9%

Nashville, TN

$423,105

31.5%

$1,650

50.4%

13.8%

-32.1%

$1,788

20.4%

Providence, RI

$432,307

17.2%

$1,686

34.0%

23.3%

-24.0%

$1,799

15.2%

Milwaukee, WI

$261,710

11.7%

$1,020

27.7%

12.6%

N/A

$1,175

7.6%

Jacksonville, FL

$345,220

31.1%

$1,346

49.9%

3.5%

-22.0%

$1,724

21.6%

Memphis, TN

$220,487

20.9%

$860

38.3%

11.1%

-8.2%

$1,496

14.8%

Oklahoma City, OK

$207,622

17.8%

$810

34.8%

9.0%

-19.6%

$1,298

12.6%

Louisville, KY

$232,861

14.2%

$908

30.6%

14.2%

-10.6%

$1,248

11.6%

Hartford, CT

$308,417

14.5%

$1,203

31.0%

21.2%

-35.6%

$1,539

10.8%

Richmond, VA

$317,518

13.6%

$1,238

30.0%

15.7%

-23.2%

$1,521

13.4%

New Orleans, LA

$260,769

13.7%

$1,017

30.1%

17.9%

-18.5%

$1,517

18.4%

Buffalo, NY

$235,940

18.1%

$920

35.1%

26.9%

-14.4%

$1,188

10.8%

Raleigh, NC

$433,065

34.9%

$1,689

54.3%

12.4%

-38.6%

$1,687

18.6%

Birmingham, AL

$230,816

17.1%

$900

33.9%

5.6%

-22.3%

$1,273

11.4%

Salt Lake City, UT

$589,622

28.8%

$2,299

47.4%

25.1%

-35.1%

$1,634

20.0%

*Table ordered by market size

**Assuming a 30-year fixed-rate mortgage with a 20% down payment

About Zillow Group
Zillow Group, Inc. (NASDAQ: Z and ZG) is reimagining real estate to make it easier to unlock life’s next chapter. As the most visited real estate website in the United States, Zillow® and its affiliates offer customers an on-demand experience for selling, buying, renting or financing with transparency and ease. 

Zillow Group’s affiliates and subsidiaries include Zillow®, Zillow Offers®, Zillow Premier Agent®, Zillow Home Loans™, Zillow Closing Services™, Zillow Homes, Inc., Trulia®, Out East®, ShowingTime®, Bridge Interactive®, dotloop®, StreetEasy® and HotPads®. Zillow Home Loans, LLC is an Equal Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org).

i The Zillow Real Estate Market Report is a monthly overview of the national and local real estate markets. The reports are compiled by Zillow Research. For more information, visit www.zillow.com/research. The data in the Zillow Real Estate Market Report are aggregated from public sources by a number of data providers for 931 metropolitan and micropolitan areas, dating back to 2000. All current monthly data at the national, state, metro, city, ZIP code and neighborhood levels can be accessed at www.zillow.com/research/data.
ii Zillow’s real-time mortgage rates are based on thousands of custom mortgage quotes submitted daily to anonymous borrowers on the Zillow Group Mortgages site by third-party lenders and reflect recent changes in the market. Zillow Group Marketplace, Inc. is a licensed mortgage broker, NMLS #1303160.
iii Inventory figures stated in this report are from Zillow’s raw for-sale inventory metric, which is more responsive to real-time market shifts. Previous editions of the Zillow Market Report have reported the smoothed for-sale inventory metric, which is a trailing three-month average. Each version of Zillow’s for-sale inventory metric is available as a time series at www.zillow.com/research/data/. Please contact [email protected] with any questions.

 

SOURCE Zillow





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