Homebuyers today face a number of challenges and obstacles. Aside from all the pain normally associated with the process of finding a house and assembling the paperwork to apply for a mortgage, they are also facing an environment in which interest rates are more than twice what they were just two years ago.

The difference between the low 2.68% rate of December 2020 and last week’s 6.94% rate means that, despite the cooling of the national housing market, homebuyers are getting a lot less for their money. Consider that a $500,000 mortgage from late 2020 would cost $2,023 per month for principal and interest, whereas currently, it would cost $3,306, an increase of more than 63% to borrow the exact same amount. To think of it another way, a current homebuyer with a $2,000 monthly budget can afford to borrow only $288,000, more than 40% less than he could borrow just 2 1/2 years ago.