Data Reveals Today’s Monthly Payment is More Affordable for Some Markets Than 2016

Based on monthly payment sensitivity data, today’s monthly payment on the median-priced new home is more affordable for some markets than even 2016.

According to Ali Wolf, Chief Economist at Meyers Research, “The assumption is that mortgage rates will stay low for the foreseeable future. That helps, but doesn’t eliminate, the risk that the housing market could still face an affordability crunch if home prices continue to rise at the rapid pace.”

“In particular, if home prices rise 10%+ more than where we are today, consumers will really start to feel pinched and many may become priced out of the market.”

See data below. The dollar amount shows the monthly difference between today’s payment (assuming current homes prices and mortgage rates) and the same data during the respective time periods. A negative number means the monthly payment in the given year was cheaper than today. A positive number means the mortgage was more expensive than today. “Today” is marked by July 2020.

Credit: Meyers Research