What happens to home prices when mortgage rates fall sharply?
The median home price was $175,400 in December, down 15.3% from $207,000 in December 2007. The median price in November this year was $180,300…
The average 30-year mortgage rate was 5.29% in December, down from 6.09% in November, according to Freddie Mac.
That’s a 2.7% month-on-month fall in home prices, but if you’re looking at the monthly mortgage payment with a 20% down payment on the median home price, that fell from $873.16 to $778.33 — a month-on-month drop of 10.9%. Yikes.