September 17th, 2019 6:30 AM by Jackie A. Graves, President
Slower home price
growth and lower mortgage rates mean home buyers are paying less on their
monthly mortgage payment than a year ago. The principal and interest payment on
a median-priced home—what the real estate data firm CoreLogic calls the
“typical mortgage payment”—dropped in June year over year.
median sales price in June was $235,433, up 3.3% year over year. However, the
typical mortgage payment dropped 6.1%, CoreLogic reports. The decline was
mostly due to decreases in mortgage rates. A year ago, the median sales price
was up 5% year over year, and the typical mortgage payment surged 14% because
of an increase in mortgage rates. In May, however, the typical mortgage payment
posted its first annual drop in nearly three years, and home buyers started
unlocking more savings.
typical mortgage payment in June was nearly 32% lower than the all-time high of
$1,287 set in June 2006.
CoreLogic forecasters predict annual gains in home prices to
average about 4.5% on a monthly basis from July 2019 through June 2020.
Factored in with falling mortgage rate forecasts, the typical mortgage payment
likely will continue to dip and is forecasted to average a drop of 7.6% for the
last few months this year, according to CoreLogic economists. “The trend is
driven by the expectation that, on average, the rate on a 30-year fixed-rate
mortgage during the July 2019 through June 2020 period will be about 0.7
percentage points lower than a year earlier,” researchers note at the CoreLogic
Mac reported the average on a 30-year fixed-rate mortgage was 3.56% last week.
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