In recent years, the path to homeownership has been tumultuous, characterized by a series of fluctuating trends and economic uncertainties. While buyers benefited from historically low interest rates early in the pandemic, they also faced record price increases due to constrained inventory and intense competition. Now, the landscape has shifted, but not in ways that have provided much relief.
Although high interest rates have moderated home prices to some extent, the adjustments have not proven sufficient to counterbalance the heightened borrowing costs associated with these elevated rates. Compounding these challenges is the enduring scarcity of housing inventory, which persists across various cities, thereby sustaining relatively high price levels and perpetuating affordability concerns for aspiring homeowners.
The result? The estimated monthly mortgage payment for a median-priced U.S. home is nearly 60% higher today than it was just three years ago.
Trends in U.S. Mortgage Rates & Payments
Despite decreasing from the 2023 peak, mortgage rates and payments remain at near-record highs
Source: Construction Coverage analysis of Freddie Mac and Zillow data | Image Credit: Construction Coverage
It’s been more than two decades since homebuyers in the U.S. faced interest rates comparable to current levels. Despite a slight decline from its late 2023 peak of 7.6%, the average 30-year fixed mortgage rate today of approximately 6.7% remains at the highest level since 2002 and more than 2.5 times higher than the record lows of early 2021.
For perspective, between February 2022 and February 2025 (the latest three-year period with available data), average mortgage rates climbed 80%, from 3.8% to 6.8%. At the same time, median home prices rose from $317,185 to $357,138. Taken together, this has resulted in the mortgage payment for a median-priced home growing by nearly $700 per month, from $1,177 to $1,870.
Where Buyers Are Most Impacted by High Mortgage Rates & Prices
Homebuyers on the East Coast face some of the sharpest increases in mortgage payments
Source: Construction Coverage analysis of Freddie Mac and Zillow data | Image Credit: Construction Coverage
While mortgage rates are up nationally, the impact on home prices has varied regionally. In many western states—such as California and Arizona—home prices declined between 2022 and 2023, followed by minimal or stagnant growth since then. In contrast, several East Coast states experienced smaller or negligible price drops during the same period and have continued to see steady appreciation.
Consequently, prospective buyers on the East Coast confront some of the most substantial hikes in mortgage payments when comparing early 2025 to 2022. In states like Connecticut, New Hampshire, New Jersey, Rhode Island, and Maine, estimated monthly mortgage payments for median-priced homes have surged by over 70% during this three-year span.
While buyers in select parts of the South and West still experienced drastic increases in mortgage payments since 2022, the rises were less devastating. Notably, Idaho and Louisiana stand out as the only states where estimated mortgage payments rose by 40% or less during this time. However, it is worth noting that many states with slower increases over the past three years are those that had more significant price increases early on in the pandemic—between 2020 and 2022. Consequently, their slower growth since 2022 is unsurprising given the earlier surge in prices.
To determine the locations where homebuyers are most impacted by rising interest rates, researchers at Construction Coverage, a site that publishes original research on construction industry trends, ranked states according to the percentage change in the hypothetical monthly mortgage payment for a median-priced home between February 2022 and February 2025, factoring in changes in mortgage rates and home prices.
Here is a summary of the data for Alabama:
- Percentage change in mortgage payment (2022–present): +55.0%
- Total change in mortgage payment (2022–present): $419
- Mortgage payment for median-priced home (current): $1,181
- Mortgage payment for median-priced home (2022): $762
- Median home price (current): $225,539
- Median home price (2022): $205,399
For reference, here are the statistics for the entire United States:
- Percentage change in mortgage payment (2022–present): +59.0%
- Total change in mortgage payment (2022–present): $694
- Mortgage payment for median-priced home (current): $1,870
- Mortgage payment for median-priced home (2022): $1,177
- Median home price (current): $357,138
- Median home price (2022): $317,185
For more information, a detailed methodology, and complete results, see U.S. Cities Most Impacted by High Interest Rates on Construction Coverage.
