How much you’d pay per month for a typical home in 6 US cities where prices have fallen but mortgage rates are on the rise

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A home located in Seattle, Washington.
A home in Seattle.

  • Mortgage-rate hikes are throwing cold water on homebuyer activity.
  • Less demand has led to home-price declines in several markets across the country.
  • Insider compared the typical monthly payment on homes in six US cities where prices are falling.

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.

Phoenix, Arizona

A home located in Phoenix, Arizona.
A home in Phoenix.

Over the past few years, Phoenix has been one of the nation’s most competitive real-estate markets — but that’s starting to change. As housing costs and higher mortgage rates weaken buyer demand, home sales have fallen in the city.

Zillow indicates the city’s typical home value is $451,313.

Prices at market peak

Home peak price: $483,206

Mortgage rate: 5.09%

Monthly mortgage payment: $2,096

Price today

Home-price decline from peak: 6.6%

Typical home price: $451,313

Mortgage rate: 6.94%

Monthly mortgage payment: $2,388

Seattle, Washington

A home located in Seattle, Washington.
A home in Seattle.

Zillow indicates Seattle’s typical home value is $757,495. Though that’s high, home prices have been falling in the city as demand has slowed. In a September report, the real-estate brokerage Redfin described the city as the fastest-cooling market in the country.

Prices at market peak

Home peak price: $808,395

Mortgage rate: 5.27%

Monthly mortgage payment: $3,579

Prices today

Home-price decline from peak: 6.3%

Typical home price: $757,495

Mortgage rate: 6.94%

Monthly mortgage payment: $4,007

Sacramento, California

A home from Sacramento, California.
A home in Sacramento.

Sacramento’s competitive housing market appears to be losing its edge. Redfin analysts said in July that they thought the city was at a high risk of a housing downturn if the US entered a recession.

Zillow said that as of October, Sacramento’s home prices had fallen by 5.6% from their peak, pulling the typical home value down to $591,512.

Prices at market peak

Home peak price: $626,548

Mortgage rate: 5.09%

Monthly mortgage payment: $2,718

Prices today

Home-price decline from peak: 5.6%

Typical home price: $591,512

Mortgage rate: 6.94%

Monthly mortgage payment: $3,129

Nashville, Tennessee

A Nashville, Tennessee home.
A home in Nashville.

For years Nashville’s strong job market, lively entertainment, and relatively affordable housing market made it a popular homebuying destination. But as rising interest rates weigh on the real-estate market, homebuyer activity has been cooling.

According to Zillow, Nashville’s median home price is $455,477. While that’s 25.4% higher than in 2021, price growth is likely to slow as the city’s home sales shrink.

Prices at market peak

Home peak price: $460,400

Mortgage rate: 4.99%

Monthly mortgage payment: $1,975

Prices today

Home-price decline from peak: 1.1%

Typical home price: $455,477

Mortgage rate: 6.94%

Monthly mortgage payment: $2,410

Austin, Texas

A woman outside of her home located in Austin, Texas.
A woman outside a home in Austin.

Competition for residential real estate in Austin has been falling as more homes sit on the market. The additional supply has helped alleviate some competition. The CoreLogic S&P Case-Shiller Index indicates home prices in the city climbed by 18% year over year in June, falling from May’s 19.9% annual increase. The typical home value in Austin is now $553,280, according to Zillow.

Prices at market peak

Home peak price: $602,894

Mortgage 5.09%

Monthly mortgage payment: $2,616

Prices today

Home-price decline from peak: 8.2%

Typical home price: $553,280

Interest rate: 6.94%

Monthly mortgage payment: $2,927

Denver, Colorado

A home located in Denver, Colorado.
A home in Denver.

Denver’s strong economy has long been a motivator for many people moving there. As Denver’s popularity grew during the pandemic, its housing market boomed — but as is the case for many other US cities, it’s been losing steam. A report from the Denver Metro Association of Realtors found that home prices fell for the second consecutive month in August.

According to Zillow, the typical home value in the city is $622,434.

Prices at market peak

Home peak price: $650,100

Mortgage rate: 5.09%

Monthly mortgage payment: $2,821

Prices today

Home-price decline from peak: 4.3%

Typical home price: $622,434

Mortgage rate: 6.94%

Monthly mortgage payment: $3,923

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