Home prices rising in Springfield

A new study from Construction Coverage reports that national average mortgage rates climbed from 3.8% to 6.8% over the past two years, while median home prices rose from $316,778 to $347,716. As a consequence, the monthly mortgage payment for a median-priced home in the U.S. is about 54% higher today than it was two years ago.

While it's still cheaper to buy a home in Springfield, the Queen City is feeling the effects of those numbers as well. According to the study, median home prices in the Springfield metro climbed from $218,565 in 2022 to $246,414 today. Taking this median home price and the average 30-year fixed mortgage rate, estimated monthly mortgage rates in the Springfield metro have increased 58% since 2022: rising faster than the national average.

To put that into dollars and cents, a Springfield metro homebuyer in 2022 could expect an estimated monthly mortgage payment of $811 for a median-priced home. In 2024, a prospective Springfield homebuyer would expect a monthly mortgage payment of $1,282 for a median-priced home.

Why is it getting more expensive to own a home in the Springfield metro?

Greater Springfield Board of Realtors CEO Jeff Kester said it's all about supply, which has been restricted in Springfield. Starting in the early 2010s and continuing into 2019 and 2020, builders began leaving the market. He said the supply of homes in Springfield has simply not caught up to demand, and rising interest rates have further restricted supply.

“People refinance their houses at interest rates that start with two and three, and as rates go up, it diminishes the incentive that those property owners have to sell their house and move to a new one because they're going to be paying a higher interest rate on that new house,” Kester said. “So they're more likely to stay put.”