Housing affordability has hit its lowest level since 1984 as prices remain high despite soaring interest rates.

Median monthly mortgage payments rose $144 in October to more than $2,500 for the first time, according to the November 2023 ICE Mortgage Monitor Report.

It now takes around 41 percent of the median household income to cover monthly principal and interest payments – for the past 35 years it has averaged less than 25 percent, ICE noted.

That does not include taxes, insurance or any HOA fees that may be part of the homeowner’s monthly expenses.

The average 30-year fixed-rate mortgage deal dropped slightly to 7.76 percent in the week ending November 2, according to the latest data from Government-backed lender Freddie Mac. 

St. Louis saw the greatest increase in slashings, 4.2 percent, followed by Oklahoma City, 3.4 percent and Memphis, 3.0 percent, according to a Realtor.com report

Median monthly mortgage payments rose $144 in October to more than $2,500 for the first time, according to the November 2023 ICE Mortgage Monitor Report

‘Affordability pressure is not coming from interest rates alone, though,’ Andy Walden, vice president of enterprise research at ICE, said in a statement.

‘The last time affordability was this bad in the 80s, rates were in the double digits and the average home was about 3.5 times median income, in stark contrast to today’s price-to-income ratio of nearly 6-to-1,’ he added.

Walden pointed to historically limited inventory for the low supply and high prices.

But he said: ‘Now, with rates above 7.5 percent and affordability at a 39-year low, it’s fair to expect prices to weaken later in 2023.’

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And a report released this week by Realtor.com found that property prices could be about to fall in the coming months after finally starting to flatten.

‘While home prices stayed flat, the share of price reductions, while down year over year, continued to grow on a monthly basis, indicating that home prices could potentially soften in the coming months,’ read the report. 

However it identified a handful of locations in which listing prices were slashed at a faster rate this October than last year – and they are mainly in the South and Midwest.

Some 13 of the 50 large metros analyzed saw the share of price reductions increase this year compared to last October, according to the report.

St. Louis saw the greatest increase in slashings, 4.2 percent, followed by Oklahoma City, 3.4 percent and Memphis, 3.0 percent.

St. Louis, Missouri, saw an increase in reduction to home prices in October as compared with last year

Those three were followed by another ten – throughout Indiana, Wisconsin, Ohio, Texas, Missouri, North Carolina, Florida and Maryland. 

The ICE report supported the idea that the housing market was cooling and potentially reaching an inflection point.  

It found that home prices rose 4.3 percent between September 2022 and September 2023. It also noted that in September they showed the weakest monthly gain since January, at just 0.39 percent.

 It also identified a handful of markets in which house prices had already started to cool in September. They fell the most in Austin and New Orleans, by 0.31 percent and 0.14 percent respectively.