Buying or Selling a Home? Welcome to the Year of Disappointment

That may have already started to happen in some places. While sale prices were down 4.5 percent in the Northeast and 5.6 percent in the West in February from a year earlier, according to the National Association of Realtors, they were up 5 percent in the Midwest and 2.7 percent in the South. The median sale price in Manhattan may have fallen 7 percent in February 2023, to $1.06 million, compared to the same time year ago, according to data compiled by Miller Samuel, but in Orlando, Fla., prices were up almost 4 percent, to a median of $358,000. In other cities, like Houston, prices remained virtually flat, falling less than 1 percent, to a median of $302,250, during the same period, according to Miller Samuel.

But even without a price increase, buying a house today is more expensive than it was a year ago, and considerably more expensive than it was before home prices rose at their fastest pace in history during the first part of the pandemic.

Buy a median-price home today, with a 20 percent down payment on a 30-year loan, and you’ll pay $1,808 a month in principal and interest, 23 percent more a month than you would have paid if you bought the same home a year ago, when the median sale price was $367,225 and interest rates were 4.42 percent.

If that depresses you, are you sitting down? That house you buy today will cost you 84 percent more a month to own than it would have if you bought it in March 2019, when the median price was $255,875, interest rates were 4.06 percent, and your monthly payments would have been a humble $984.

A buyer’s only reprieve, it would seem, is a drop in interest rates. But how likely is that? Bob Walters, the chief executive of Rocket Mortgage, predicts that mortgage rates will remain stable, or maybe slip a little in the months ahead, barring “an unwelcome inflation report.”