US Housing Market Hit by Mortgage Rate Spike

A quiet crisis is unfolding in the US housing market due to soaring mortgage rates and record home prices. According to Home Depot CFO Richard McPhail, 'Housing turnover… has been at historical lows.' The main issue is that many Americans don't have enough money for a down payment and monthly mortgage obligations.

For example, on a $400,000 home, the monthly mortgage payment jumps from $1,686 at 3% interest to $2,661 at 7% interest. Over 30 years, this would result in an additional $350,924 in interest payments.

The housing market's sluggish turnover rate is having broader economic implications. National Mortgage Professional reported that 'Monitoring housing turnover gives us an important read on the housing market, but also a glimpse of the potential demand for everything from couches to contractors and, ultimately, on the health of the broader economy.'