Monthly Housing Payments Hit Record High in March

Monthly housing payments in the U.S. reached unprecedented levels in March, underscoring the ongoing challenges and shifts in the real estate market.

The average monthly U.S. housing payment hit a record high of $2,721 for the four weeks ending March 24, a 10% increase compared to the previous year, according to real estate brokerage Redfin.

Payments are high because of high mortgage rates and escalating home prices. Mortgage rates are near 7%, and the median home sale price is up 5% year over year to about $375,000 — about $9,000 short of the record high in June 2023.

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"High mortgage rates aren't deterring buyers as much as they were last year; a lot of people want to get in now before prices go up more," Miami Redfin agent Rachel Riva said. "All of my recent listings have gone under contract in under 10 days, and most of them have received multiple offers."

Riva said buyers are reducing the impact of elevated rates in a few ways. Some are making high down payments to lower their monthly costs, and some are taking on high rates now with the hope of refinancing when rates come down.

Nearly 6% of home sellers reduced their asking price last week, a sign that price growth could ease in the coming months. The number of homes on the market hit its highest level of any March since 2020 when the onset of the COVID-19 pandemic ground the housing market to a halt.

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Demand is returning with the increased supply, which is why price growth is still strong. Applications for mortgages are up 14% compared to a month ago, and pending home sales are just 1% lower than they were a year ago — the smallest decline since the beginning of the year.

As mortgage payments hit record highs, homebuyers are increasing the amount of down payments they're making. The median down payment was $55,640 in February — up 24.1% from $44,850 a year ago and the biggest annual percentage increase since April 2022, according to Redfin.

The typical homebuyer’s down payment in February was 15% of the purchase price, up from 10% a year earlier.

"Homebuyers are doing whatever they can to pull together a large down payment to lower their monthly payments moving forward," Riva said. "The smallest down payment I've seen recently is 25%. I had one client who put down 40%."

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