Buying Power

Homebuyers, newly infused with extra spending power, are returning to the housing market as they come to terms with 6% rates and move to beat out increasing competition. Redfin reported that buyers on a $3,000 monthly budget have gained almost $40,000 in purchasing power as rates have fallen from a peak in October 2023. This theoretical buyer can afford a $453,000 home with a mortgage rate at roughly 6.7%. Just a few months ago, they could only snag a $416,000 home at a 7.8% interest rate, a $37,000 difference. Costs are easing for buyers across the income spectrum, of course. The monthly mortgage payment on the typical U.S. home (about $363,000) is $2,545 with a 6.7% rate but clocked in…