Rising home prices can’t stop it
Home prices might be up, but American mortgage payments are actually falling. In fact, according to new data, the average monthly mortgage payment has dipped over 6 percent in just the last year.
Mortgage payments head downward
A recent analysis from property data firm CoreLogic shows that mortgage payments have decreased by 6.1 percent since last May. It’s the first time in nearly three years the typical mortgage payment has dropped.
Though median sale prices are up 3.3 percent over the year, falling mortgage rates have negated their impact. Rates have fallen nearly a full percentage point in the last 12 months.
According to CoreLogic’s data, an uptick in rates actually caused the opposite to happen this time last year, with payments jumping 14 percent in June 2018. Across all of 2018, average mortgage payments rose about 13 percent every month.
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The current typical mortgage payment is nearly 32 percent lower than the all-time high, reached in June 2016. At the time, rates averaged around 6.7 percent.
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More drops to come
It sounds like the dip in payments isn’t just a one-time thing. In fact, according to CoreLogic’s Andrew LePage, the next year will see typical mortgage payments drop by about 4.4 percent per month.
Still, dropping rates aren’t the only thing today’s buyers have going for them. There’s also another benefit: more disposable cash.
“Beyond the typical mortgage payment’s decline over the past year, many homebuyers are better off this year because of at least modest annual income gains,” LePage said.
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