Instant Reaction: Mortgage Rates, October 19, 2023

Since the first week in September, home buyers have faced weekly increases in mortgage interest rates. Today's release at 7.63% shows they are close to the historical average since 1971 of 7.74%. The typical existing condo of $353,800 means a monthly mortgage payment of $2,004. The latest month's REALTOR® Confidence Index shows 29% are skipping paying a mortgage and buying via all cash.

Undeniably, many potential home buyers cannot make the typical monthly payment, let alone pay all cash. However, when deciding to rent vs buy, one must calculate the total cost of homeownership (maintenance, utilities, commuting, etc.) and the total financial benefit. Based on new Fed data this week, in 2022, the median net worth of homeowners was $396,200 vs renters at $10,400. There is no question about the wealth gains that homeownership provides.