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These are definitely some challenging times if you want to buy a home for the first time. And it's a bit of a challenging time even if you own a home with a mortgage that you got a few years ago in the 3% range and now want to buy a new one — which would likely mean taking out a mortgage at roughly twice your current rate.
The National Association of Realtors® reports that existing single-family home prices climbed 3.5% on an annual basis in the fourth quarter of last year, to a national median price of $391,700. The cost of the monthly mortgage payment on that home rose 10%.
After peaking last summer, mortgage rates have fallen, noted Jessica Lautz at the National Association of Realtors®.
"As interest rates come down, buyers come into the home buying market once again,” she said.
But "they are encountering an environment with extremely limited housing inventory,” Lautz added. "That pushes home prices up, as bidding wars start happening again. It's very tough, especially for first-time homebuyers who do not have housing equity"