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61 November 2025 J O U R N A L themortgagepoint.com November 2025 ยป Assuming a 10% down payment and average property taxes and homeowners' insurance, the median payment would have been $3,096." "In September, the median price was down seasonally to $415,200. At a 6.2% interest rate, a buyer now has a median monthly payment of $2,824, a savings of $271 per month," Sturtevant said. "That average $271 per month savings could be enough to bring some buyers into the mar- ket. But growing economic uncertainty is keeping others on the sidelines. The Mort- gage Bankers Association has reported that lower rates have led to a big increase in refi- nance activity, but purchase applications have been muted. In a recent survey of real estate agents in the Mid-Atlantic, financial concerns are leading more buyers to back out of deals this fall. Multiple offers are less common, and buyers are asking for more concessions." Sturtevant continued: "Conditions are very different depending on what market you are looking at. Some of the highest-cost markets, including New York and Boston, are still seeing healthy price gains because these regions have strong local economies and high-wage jobs, along with still-limited inventory. It will be important to watch local economic conditions, including unemployment rates, job growth, big employer layoffs or hiring freezes, to help gauge which markets are likely to see cooler prices in the fourth quarter." DESPITE FALLING MORTGAGE RATES, HOME PRICES KEEPING BUYERS SIDELINED T he average 30-year mortgage rate now hovers at around 6.2%, just over half a percentage point lower than the 6.8% average recorded earlier this year. Despite this, homebuying activity remains stuck near three-decade lows, pre- senting a clear sign that it's not just interest rates, but also sky-high home prices, that continue to block millions of Americans from entering the housing market. As detailed in a post from Harvard University's Joint Center for Housing Studies, mortgage costs have more than doubled since 2020, leaving many would- be buyers unable to afford even modest homes. For example, the typical first-time home purchaser with a small down pay- ment now faces a monthly mortgage bill of roughly $2,500, compared to just $1,200 five years ago. To qualify for such a loan, a household would need to earn more than $130,000 a year, nearly twice the income required in 2020. While today's mortgage rates may feel high compared to the ultra-low levels seen during the pandemic, they are not extreme by historical standards. Home prices, however, are another story. Nationally, prices have surged about 50% since 2020, pushing the median home to a record five times the median household income. This is a level not seen before in U.S. housing history. Even a full percentage-point drop in rates would only reduce monthly mort- gage payments by about as much as a 10% decline in home prices. To return afford- ability to 2020 levels, rates would have to fall close to zero (clearly, an unrealistic scenario, especially since rising property taxes and insurance costs would still keep total payments higher than before). The bottom line is that lower interest rates alone can't solve the affordability crisis. The only sustainable path forward will likely come from slowing home price growth and expanding the supply of more modestly priced housing. That means boosting construction of smaller homes, condos, and manufactured housing, which are all categories that have fallen far below historical building levels since 2010. While the recent rate decline is a welcome sign for aspiring buyers, experts warn that true relief won't come until more affordable homes are built, giving middle-income families a fighting chance to achieve homeownership once again. GROWING DIVIDE AMONG CONSUMERS PERSISTS AS CREDIT RISK TAKES A TURN R ecent trends in consumer credit risk point to a widening gap amongst American consumers, with some exhibiting greater financial resilience and others dealing with more