Reversing an almost year-long trend, and with the help of declining mortgage rates, the typical mortgage payment dropped below that of home prices in March 2019, according to a new study by CoreLogic. 
According to the report, the U.S. median sales price in March 2019 of $222,482 was up 3.5% year-over-year, which is down from an annual 8% gain last March. Mortgage payments grew by just 1.9% in March 2019—a steep drop from the reported 11% increase in March 2018.
“Moreover, some rate and price forecasts suggest the mortgage payments homebuyers face the rest of this year will, on a year-over-year basis, be only slightly higher or a tad lower, which could help spur home sales,” the report states.
CoreLogic’s Home Price Index (HPI) forecasts annual gains in home prices each month from April 2019 to March 2020 that average 4.3%. If those forecasts hold, combined with the average among six mortgage rate forecasts, the annual change in the typical mortgage payment each month will have an average gain of 0.9%.
The HPI suggests average sale prices will rise 1.8% through March 2020. Based on that projection, the real typical monthly mortgage payment would increase to $910 by next March, which is a slight increase from $878 in March 2019.
Recent numbers pale in comparison to all-time highs, as real mortgage payments spiked to $1,281 in June 2006 when the average mortgage rate was 6.7%. The average sale price in June 2006 was $248,066.
Freddie Mac’s latest Primary Mortgage Market Survey reported mortgage rates for the prior week were unchanged at 3.82% .
“Mortgage rates were mostly unchanged from last week due to easing of trade tensions with Mexico which helped stabilize markets. These historically low rates should provide continued opportunities for current homeowners to refinance their mortgages – which combined with new homebuyer activity – will help sustain the momentum in the housing market in 2019,” said Sam Khater, Freddie Mac’s Chief Economist.
Freddie Mac reports that the average rate for a 30-year fixed rate mortgage has dropped 0.80% year-over-year, while the 15-year fixed rate mortgage fell 0.02% this past week to 3.26%.