Although the average sale price in June was up 3.3% year-over-year, the typical mortgage payment fell 6.1% thanks to a 0.8% annual drop in mortgage rates, according to the latest information from CoreLogic.
The typical mortgage payment had increased annually every month for the past three years, it had its first decline in May, when it fell around 3%. Median sale prices in June 2018 were up 5% annually and the typical mortgage payment was 14% higher than the prior year due to a 0.7% increase in mortgages rates from 2017.
CoreLogic states the typical mortgage payment rose year-over-year each month last year, with increases averaging 13%.
The CoreLogic Home Price Index Forecast suggest annual gains in home prices from July 2019 and into June 2020, averaging 4.5%. Additionally, the typical mortgage payment during that same period is expected to drop 4.4%, and the average decline for the last six months of the year will be 7.6%.
CoreLogic states this trend is driven by the expectation that the rate on a 30-year fixed rate mortgage from July 2019 to June 2020 will be 0.7% lower than its current number. Freddie Mac reported mortgage rates rose slightly last week to 3.56%.
Despite the hike, mortgage rates haven’t been below 3.6% for four-consecutive weeks since Q4 2016.
According to CoreLogic, mortgage payments in June 2019 remained 31.8% below the all-time high of $1,287 recorded in June 2006. Mortgage rates in June 2006 averaged 6.7%. The median sales price in June 2006 was $249,232 ($197,000 in 2006 dollars) compared to June 2019’s average of $235,433.
Along with mortgage payments falling over the past year, CoreLogic states that homebuyers are gaining more power with annual income gains. Personal disposable income rose about 3.3% during the first two quarters of the year.
The slight increase in mortgage rates did cost nearly 2 million borrowers eligibility for refinancing, according to a report by Black Knight.
Black Knight states that the refinancing population fell back to 9.8 million. The refinance population was at a record 11.7 million last week week when the average mortgage rate was 3.49%.