Mortgage rates may have peaked in late October, but we're a long way from the 3% rates that drove up housing prices as well as the number of homes sold just two years ago.

Last week's news that existing home sales sank even deeper in October probably came as no surprise to those people hoping to buy or sell a home. Bankrate reported 30-year mortgage rates topped 8% in October while Freddie Mac's more conservative survey put the peak at a 23-year high of 7.8%.

Either number is more than double what new home buyers enjoyed in October 2021 and appears to have pushed monthly costs too high for some would-be buyers. USA TODAY calculated payments on a new mortgage based on October listing prices in 10 cities from Ventura, California, to the New York City metro area. The results:

• Potential homeowners' buying power has been cut in half in most markets during the past two years.
• Median family incomes in all 10 markets are well below the amount needed to service mortgages on homes at each city's median listing price.

The difference 5 percentage points has on housing affordability

Consider what it cost to purchase a house in Des Moines, Iowa, in October where the median home list price is a bit under the U.S. median at about $365,000, according to Realtor.com. List prices jumped more than 20% in Des Moines from October 2021, but check out what the impact October's mortgage rates have on the math:

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What's happening in Des Moines is happening across the country, according to the Atlanta Fed's Home Ownership Affordability Monitor. In September, you would have needed 45% of the average family income to pay the monthly mortgage, insurance, taxes and PMI for the average new home.

As a whole, Americans are earning about 9% more than they were in 2021, according to the Census Bureau, but those gains fall far short of covering the monthly principal and interest payments, which have risen 81% in that same time, according to National Association of Realtors’ most recent affordability index.

How much your income needs to rise to keep up with mortgage rate increases

Have mortgage rates peaked?

The number of homes sold has fallen nearly every month since early 2022 when the Fed announced its plans to raise interest rates in an effort to tame 40-year high inflation. The Fed's actions directly affect short-term interest rates, but they also influence expectations about longer-term interest rates, which, in turn, have increased what we pay for new mortgages.

Just as mortgage rates followed the Fed's rapid rate increases, they've started to slide in recent weeks as a consensus grows that the Fed's policymaking committee may be done or nearly done raising rates. Few investors who bet on the movements of interest rates expect the Fed to make policy changes at their next meetings in December and January, according to the CME FedWatch Tool.

How higher mortgage rates raised monthly costs across the country

We looked at 10 locations across the country to compare the monthly costs that potential homeowners faced in October 2021 vs. October 2023, based on Realtor.com median list prices. In nearly all 10 cities below, would-be homeowners' buying power has been cut in half during the last two years based on a 7.5% interest rate and 20% down. We use the NAR bar for affordability: Allocating 25% of household income toward principal and interest.

In the charts below, you can scroll through the 10 locations, which are divided into three categories that ranged in in affordability in 2021.

More about how we calculated the 10 cities' data

◾ Affordability is based on the National Association of Realtors standard: 25% of total family income paid toward principal and interest. Some, such as the Atlanta Fed, use 30% as a cutoff, but that often also includes other items such as insurance and property taxes, which can ultimately amount to 5% of a family's income.

◾ Monthly mortgage costs are based on a 7.5% rate because that appears more representative of the rates in November, although it's clear many paid more than 8% in October. We also assume home buyers made a 20% downpayment.

◾ What we actually pay: Yes, some pay much more than the 25% or 30% of their incomes on mortgages, but its clear in the data we've collected that mortgage costs have ballooned well beyond a few percentage points of family incomes.