Last summer, affordability dropped with a sudden increase in interest rates. This means that buyers have less purchasing power and cannot afford as much house as they could in spring 2022.

In spring 2022 I appraised a house that was under contract for $400,000 with $20,000 down and $380,000 to be financed. The monthly payment was about $2400. Fast forward to this spring after rates had doubled. $2400 per month now will service less than $300,000. Add the $20,00 down payment and that buyer would be able to buy a $320,000 house.