Some (many?) would be home buyers are discovering that mortgage interest rates are making their potential monthly housing costs much higher than anticipated.

Just a year ago, the mortgage interest rate was 2.8% for a 30 year fixed rate mortgage and now it's 5.3%.

Combine higher mortgage interest rates with higher home values and today's buyers find much higher mortgage payments...

$225,000 = 2021 Median Sales Price of Townhomes, Duplexes and Condos

$1,038 = monthly payment assuming 10% downpayment, 2.8% mortgage interest rate

$241,767 = 2022 Median Sales Price of Townhomes, Duplexes and Condos

$1,431 = monthly payment assuming 10% downpayment, 5.3% mortgage interest rate

So, the potential monthly housing cost of buying a median priced townhouse has increased from $1,038 to $1,431 in the past year.

This might cause some (many?) would be buyers to explore renting instead.

But... rental rates have also increased significantly over the past year!

I don't have a large data set to support this statement, but generally speaking, townhouses that might have rented for around $1,100 a year ago are now often renting for $1,350 or more.

So, perhaps rental rates aren't increasing as quickly as monthly housing costs if you purchase a townhouse... but these higher rental rates mean that choosing to rent instead buy doesn't provide quite as much relief of your housing costs as you might imagine.