The Average New-Car Payment Is Shrinking Homebuyers’ Budgets by $135,000

Realtor.com reports that the average new-car payment has climbed to $770 per month, reducing the homebuying power of a median-income household by as much as $135,000. Rising vehicle prices and higher auto loan rates are making it more difficult for buyers to qualify for mortgages, forcing many to lower their home price expectations or delay purchasing altogether.

This growing connection between automotive debt and housing affordability illustrates how major financial decisions increasingly compete for consumers' budgets, creating implications for auto dealers, lenders, real estate professionals, mortgage providers and financial advisors that can help consumers navigate rising debt obligations while planning for long-term financial goals.