Originally Posted By Mlinebacker0⏩

In just 18 months, median home prices surged 26.5 percent, from $322,600 at the end of the second quarter of 2020 (or “2020Q2”) to $408,100 in 2021Q4.

That price surge, together with the higher interest rates the Fed promises now, makes a huge difference in buyers’ options and their monthly payments.

Let’s compare mortgage payments for the $322,600 in 2020Q2 and the $408,100 in 2021Q4 using a 20 percent down-payment and the 30-year conventional mortgage national average interest rate, and take no account of points or property taxes.

If one bought the property at the end of 2020Q2, the mortgage carry charge on that loan using the national average 30 year 3.07 percent interest rate that was in effect at the end of 2020Q2, buyers would make a $64,520 down payment and make required monthly payments of $1,097.84.

If one bought the property at the end of 2021Q4, the mortgage carry charge on that loan using the national average 30 year 3.11 percent interest rate that was in effect at the end of 2020Q2, buyers would make a $81,620 down payment and make required monthly payments of $1,395.90, or 27 percent more than in 2020Q2. But if the same mortgage terms were secured just last week, March 24, after the Fed raised their rate by a quarter-point, when rates spiked to 4.42 percent, the payment would be $1,638.74, an incredible 49 percent more than at 2020Q2—in just 18 months! From the beginning of the year to last week—less than three months—the payments have spiked over 17 percent!