Instant Reaction: Mortgage Rates, August 31, 2023

There was virtually no change to the already elevated mortgage interest rates in the last week. Rates declined slightly from a high of 7.23% to a still high rate of 7.18%. The lack of movement is discouraging to home buyers who are also facing higher home prices.

At a rate of 7.18%, a buyer would have a monthly mortgage of $2,234 for an existing single-family home and $1,938 for an existing condo. In the West, where buyers are rebounding into the market, the typical existing-home price is $610,500, which translates into a monthly mortgage payment of $3,309. The Midwest continues to be the most affordable region to purchase a home, with a median price of $304,600—a typical monthly payment of $1,651.

Until the Fed makes the right decision on the Fed Funds Rate, buyers will continue to see higher home buying costs. These higher rates will continue to exacerbate housing inequality and limit the number of first-time and minority buyers.