If you bought a home for $300,000 in the last year with a 30-year mortgage at a rate of 3.25% your monthly payment (before taxes and insurance) would have been $1,305.62. That same house today at a mortgage rate of 6.39% would cost you $1,874.55 per month. This is an increase of $568.93 per month.

Put another way is that last year if you could afford the mortgage on an $300,000 house the same monthly payment will only buy you a $208,948 home today. This is why we have seen the demand for housing drop in many markets, as sellers have not yet adapted to the downward demand and many buyers can’t afford increased costs.

Think rates can’t go higher?
You only need to look as far back as the 1980 to see mortgage rates over 8%.

The winners in all of this are the people who bought their homes and stayed put, not selling and moving every few years to a larger more expensive home; those who have been paying down, or better yet paying off their mortgage.