Mortgage rates showed little movement this week, remaining below 6%. According to Freddie Mac, the 30-year fixed mortgage rate rose to 5.81% from 5.78% the previous week. However, since the beginning of the year, home buying has cost about $800 more every month.
These higher mortgage rates hurt affordability, and middle-income home buyers can afford to buy fewer homes. Even though inventory has increased 13% compared to January, not all home buyers can afford to buy these additional homes. In fact, in order to be able to afford those homes, it appears that buyers need to earn more than $150,000 per year. For instance, buyers earning $75,000 can currently afford about 25,000 fewer listings now compared to January. Nevertheless, there are about 20,000 more homes available for sale for buyers earning $200,000. While it is promising to see more homes available in the market, more entry-level homes are needed.