Monthly Mortgage Payments Just Hit All-Time High — And Prices Jumped The Most In 10 Months

The siren song of homeownership has hit a sour note for many prospective buyers.

The nationwide median home-sale price has surged to an eye-watering $380,000, according to a Thursday Redfin Corp RDFN report, reflecting a 5% year-over-year increase — the most substantial uptick in almost a year.

The rising tide of home prices, propelled by a severe lack of inventory, swelled the typical monthly mortgage payment to an all-time high of $2,649, Redfin said.

Here’s a look into the data and its implications for the housing market and key players like Rocket Companies Inc RKT, Lennar Corp LEN and Wells Fargo & Co WFC.

The Redfin Data: A severe inventory shortage is driving the price surge, Redfin noted, as new listings are down 10% while the total number of U.S. homes for sale plummeted 19%. The lock-in effect is keeping homeowners in place, as they don't want to part with their low mortgage rates, most of which are below 6%. Current rates are climbing toward 8%.

Notably, pending sales declined 14%, Redfin said, and mortgage-purchase applications dipped 27%, implying a smaller pool of potential borrowers for lenders like JPMorgan Chase & Co JPM.

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Despite sluggish demand, there is competition persisting for the few available homes. It's a double-edged sword for mortgage originators like Ocwen Financial Corp OCN, whose revenues are likely to be affected by fewer mortgage applications.

Miami An Outlier: While nationwide trends are significant, the Miami real estate market is charting its own course. With a staggering 17% year-over-year increase in median home-sale prices, the metro area is in a league of its own.

A combination of supply shortage and influx of cash-rich out-of-town buyers is fueling the unique situation. That resilience could be an appealing factor for home builders like PulteGroup, Inc PHM considering the market’s resistance to broader economic trends and its allure for wealthy buyers.

The Last Word: Continued inventory shortages and climbing mortgage rates are signaling a cautionary note in the sector, but as Miami’s market shows, local factors can buck the trend. The data sends mixed signals for companies like Bank of America Corp BAC, who are deeply embedded in the home loan ecosystem.

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