Mortgage rates surged for the fourth straight week. Although investors seem to be concerned about the economy's long-term prospects, mortgage rates continued their upward trek. The 30-year fixed mortgage rate rose more than 90 basis points (0.90%) within a month, exceeding expectations. Specifically, mortgage rates rose to 4.67% from 3.76% in the first week of March, significantly increasing the borrowing cost for buyers. In March, for a median-priced home, the monthly payment for a 30-year fixed mortgage rose more than $170, due to higher mortgage rates.
Meanwhile, millennial buyers continue to make up the largest share of home buyers, according to NAR's recent Gen Trends report. This indicates that many Millennials were able to benefit from low mortgage rates in the past year when rates were about 3%. Nevertheless, many of these buyers are expected to be priced out this year. Although there isn't any set income requirement to buy a home, the income that households need to earn in order to afford to buy a home has increased significantly, due to rising home prices and mortgage rates. Specifically, for the median-priced home, the qualifying income rose to $81,200 from $61,400 a year ago. While 55% of Millennials had that income in 2021, only 41% of them currently do.