. Potential buyers are already facing extraordinarily tight supply and sky-high prices. With both rates and prices considerably higher, the median mortgage payment is now more than 20% higher than it was a year ago.
Buyers are also facing inflation on everything else in their budgets, which exacerbates the affordability issues. Rents are also surging higher at a record rate, causing more potential buyers to be unable to put aside money for a down payment. In addition, as rates rise, some buyers will no longer qualify for a mortgage. Lenders have been much more strict about how much debt a borrower may take on in relation to income.
Economists are already beginning to revise their sales figures lower for the year. Lawrence Yun, chief economist for the National Association of Realtors, said Tuesday that he expects the rate to hover around 4.5% this year, after previously predicting it would stay at 4%. NAR's latest official prediction is for sales to drop 3% in 2022, but Yun now says he expects they will fall 6% to 8%. NAR has not officially updated its forecast.
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