A new report by the Mortgage Bankers Association (MBA) caught our eye by highlighting an unfortunate reality of low-interest rates: while they initially make homebuying affordable for middle- and working-class Americans, cheap money flooding into the market for an extended period will cause housing affordability issues as home prices soar. 

Data from MBA shows that's happening as home price appreciation since the beginning of the virus pandemic has been due to low-interest rates and tight housing inventory, creating some of the fastest home price growth spurts in decades. Many homebuyers chased prices in fierce bidding wars, as they took on the largest average purchase loan sizes on record. 

"Prospective buyers still face elevated sales prices in addition to higher mortgage rates. The heavier mix of conventional applications again contributed to another record average loan size at $453,000," said Joel Kan, an MBA economist.