Buying a New Home Could Cost Existing Mortgage Holders This Much More Monthly

Rising mortgage rates and high home prices have significantly increased the cost of purchasing a home. According to a new Realtor.com report, the typical U.S. mortgage holder would pay about $1,100 more per month in principal and interest to buy a median-priced home at a 7.32% mortgage rate. The estimated monthly payment would rise from $1,332 to $2,468—an 85.3% increase—and housing costs would consume 15.6 percentage points more of the typical U.S. household’s income. (See the full table below for local data.)

The typical outstanding mortgage has an interest rate of about 4.0%, considerably lower than the 7.32% rate used to estimate the cost of buying a home today. Because home prices and mortgage rates have risen since many current loans were issued, today’s buyers face a substantial affordability challenge. In roughly one-third of the 100 largest metropolitan areas, purchasing a median-priced home would more than double the typical mortgage holder’s current monthly principal-and-interest payment.

“Home sales have been stuck for several years, and this research helps illuminate one of the major friction points for today’s homeowners who might like to move. Together, home prices and mortgage rates have drastically changed what it takes to buy a home,” said Danielle Hale, Chief Economist at Realtor.com. “For the typical mortgage holder, buying a home at today’s median-price and current rates would mean finding about $1,100 more each month for principal and interest, before property taxes and insurance. Lower rates would help, but even at 6%, the typical payment would still be more than 60% higher. For many families, that is money they simply don’t have to spare.”

The increase in monthly payments varies widely across the country. Portland, Maine; San Jose; and Los Angeles have the largest percentage increases, while Pittsburgh, Baltimore, and Buffalo have the smallest.

Portland, Maine, ranks first nationwide for the percentage increase current mortgage holders would face when buying a median-priced home. The estimated monthly principal-and-interest payment would climb from $1,270 to $3,392, a 167.0% increase. This puts Portland ahead of even some of California’s costliest markets in the size of the increase relative to what existing mortgage holders pay.

In San Jose, the estimated payment for a home purchase rises to $7,039 per month, compared with $2,659 for a typical current mortgage holder—an increase of 164.8%. The estimate assumes a typical down payment of 26.2%, highlighting how high home prices keep financing costs elevated even when buyers contribute a substantial share of the purchase price. In Los Angeles, the estimated payment increases from $2,149 to $5,628, or 161.9%.

Oxnard, CA, and Albany, NY, complete the five markets with the largest percentage increases. In both, the estimated payment for a purchase is more than 140% above what a typical current mortgage holder pays.

In more expensive markets, larger mortgage balances magnify the effects of higher borrowing costs. Homeowners who move from an older loan with a lower interest rate to a new mortgage may face a substantial payment increase, making it more difficult to move within the same market. Higher purchase payments also create a greater barrier for first-time buyers.

Most Locked-in Housing Markets:

Among the 100 largest metropolitan areas, Pittsburgh has the smallest increase in mortgage payments, although purchasing a home still means a substantial rise in monthly costs. The estimated principal-and-interest payment for a median-priced home is $1,441, versus $1,005 for a typical current mortgage holder—a 43.3% increase. Baltimore ranks next at 45.0%, followed by Buffalo at 46.1%.

More affordable housing helps keep the payment gap narrower in these markets. Many lower-cost metros also began the current cycle with higher outstanding mortgage rates, reflecting a less pronounced pandemic-era buying boom, fewer refinances, or steadier sales activity amid higher rates. Because the difference between an existing mortgage rate and a new one is smaller, homeowners face a lower financial penalty for moving.

“More affordable markets offer homeowners a smaller payment jump, not an escape from higher costs,” said Hannah Jones, Senior Economist at Realtor.com. “The estimated increase is about 43% in Pittsburgh versus 165% in San Jose. Lower home prices and, in many markets, higher rates on existing loans help narrow that gap, making a move more attainable.”

Further, San Antonio illustrates how declining home prices can also lower the affordability barrier. In September, its median listing price was $320,374—down 2.9% from a year earlier and 16.2% from its mid-2022 peak. Prices have fallen year over year for more than three years, helping keep the increase in monthly payments among the smallest in the country. The estimated payment for a home purchase is $2,053, 60.8% higher than the typical payment of $1,277 for current mortgage holders.

Lower rates would strengthen buyers’ purchasing power, but a substantial payment gap would persist. Based on September’s median listing price of $419,250 and a 14.3% down payment, every half-percentage-point drop in the mortgage rate would reduce the estimated monthly payment by about $110 to $120 and narrow the gap with payments made by current mortgage holders by approximately 8 to 9 percentage points.

At the modeled rate of 7.32%, 44.5% of U.S. households could afford a median-priced home. If rates fell to 6.5%, that proportion would increase to 48.0%. Rates would have to decline to around 6.0% for slightly more than half of households—50.2%—to afford the home. Even at that rate, the estimated monthly payment would be $2,154, or 61.7% above the typical payment made by current mortgage holders.

At a 5.0% rate, the estimated payment would fall to $1,929, making a median-priced home affordable to 54.8% of households. Even if rates returned to roughly 4.0%, the typical rate on outstanding mortgages, the payment would remain about 29% higher than the typical current mortgage-holder payment, reflecting the rise in home prices since many existing loans were originated.

“Lower rates alone would not erase the affordability gap,” Jones said. “Slower home-price growth and rising incomes would also help narrow the difference between what households pay now and what it would take to buy.”

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