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Mortgage interest rates have continued in the mid-6% range for 16 weeks. The 30-year fixed mortgage interest rate declined slightly to 6.79% from 6.87% the week prior.
Home buyers purchasing a $400,000 home with a 20% down payment at a 6.79% interest rate would have a monthly mortgage payment of $2,084. This is a savings of $217 per month from when mortgage interest rates were 7.79% in October 2023. However, the typical first-time buyer does not put 20% down. Last year, the typical first-time buyer had a down payment of 8%. In that scenario, for a home buyer purchasing a $400,000 home with an 8% down payment at a mortgage interest rate of 6.79%, the mortgage payment would be $2,397.
Housing affordability is one reason the share of first-time buyers last month (at 26%) matched the lowest share ever recorded dating back to 2008. Inventory is the second critical component. First-time buyers need, value, and rely on the expertise of REALTORS® to help find the right home and with negotiations.
