A short walk around your neighborhood could tell you that the housing market is going through something.
Whether you live in the quiet suburbs of Seattle or the busy streets of downtown Nashville, you're probably seeing fewer "for sale" signs in front yards and smaller asking prices.
It's part of the housing market's cooldown.
Gone are the days of intense buyer competition. America's new housing ecosystem has a limited number of home listings, fewer buyers, and, ultimately, lower home prices.
But that doesn't mean homeownership has become any more affordable.
For many Americans, housing is more expensive than ever before. New homeowners are suffering from a double whammy of high inflation and rising interest rates. That's led to mortgage-rate hikes that have offset affordability gains obtained through slowing price appreciation.
Freddie Mac indicates that the average rate on a 30-year fixed-rate mortgage is at its highest since April 2002. In most cases, homebuyers are facing rates that have nearly doubled since 2021.
"For the typical mortgage amount, a borrower who locked in at the higher end of the range would pay several hundred dollars more than a borrower who locked in at the lower end of the range," Sam Khater, the chief economist at Freddie Mac, told Insider.
To get a sense of how rates are affecting affordability, Insider examined six homebuying hot spots where prices have been falling, then used home-price data sent to us from Zillow to determine each market's peak home value during the latest boom as well as its typical home value today.
Using mortgage rate data from Freddie Mac, we then calculated how much the monthly payment would be for a homebuyer if they had locked in a mortgage at their market's peak — when rates were much lower than they are today — and how much they'd pay if they were to lock in at current rates.
In today's rate environment, assuming a homebuyer makes a 20% down payment and chooses a 30-year fixed-rate mortgage, a slashed listing price doesn't always mean a home has become more affordable.
This was the case for Austin, Texas, where if a buyer had purchased a home worth $602,894 in May — when prices reached a peak in the city — and got a mortgage rate of 5.09%, their monthly payment would be about $2,616.
But if they bought a home now, when the typical home value is $553,280, and locked in a rate of 6.94%, their monthly payment would jump to nearly $2,927.
Read on to see how mortgage rates are affecting housing affordability in other parts of the country.