“Short of a war or stock market crash…” Man/Woman Steve Madden Women's Wagu Bootie Dress Various styles The latest technology comfortablePuma Speed 500 Ignite Nightcat 3M Reflective Orange Men Running Shoes 189083-02US10 Adidas Ultra Boost 3.0 Crystal White (BA8922)Silver Boost 5% code: P5OFFNIKE MENS AIR MAX ADVANTAGE 2 WHITE BLACK PLATINUM SHOES 2018 **FREE POST AUSTDKNY Lior Platform Slip-On Sneakers, Black, 8.5 US / 39 EU , Columbia Women's Bangor Slip Omni-Heat Ankle Boot, Brown, Size 11.0 US / 9 UK , [BIRKENSTOCK] NEW Madrid Leather Sandals - Metallic Green - Size 37 - New In Box , $129 Alegria PG Lite Khloe Clogs Black Leather Professional Shoes Sz 41 US 10.5Womens Pimk Flower Suede Platform Open Toe Sandals Block High Heels Buckle ShoesGentleman/Lady Bed Stu Fanny in Green Burnished We have won praise from our customers. At a lower price Personalization trend , LANVIN Pink Suede Ankle Strap Peep Toe Scalloped Espadrille Wedged Heels 8 Spain , Vintage Miu Miu Heels Vintage Womens Shoes Mustard Yellow Bows Italy 36 1/2 , NEW WOMENS BORN COMFY SHEIKH MAHALA SANDAL IN BRONZE LEATHER SIZE 10 , NIB Romus Women’s Snake Leather Color Sandals Made In Spain I , YSL Opyum Black Patent Leather Heel Size 37.5$1125 NEW MANOLO BLAHNIK Tungade 90 Grey Taupe Brown Suede Ankle BOOTS 35 37 38Puma Tsugi Jun Cubism Grey - Mens - Size 11 D , NIKE DUNK BLAZER LOW GT SB GRANT TAYLOR UNIVERSITY RED WHITE BLACK YELLOW NEW 10Nike Free RN 2017 Mens 880839-101 Platinum White Knit Running Shoes Size 11Cole Haan Mens Somerset Venetian II Perf. Leather ShoeMen's/Women's Timex Expedition Shock XL Watch the most convenient comfortability Easy lifeRobert Graham mens shoes python design leather 10.5Balenciaga Triple S 2.0 sz 45 us12 , VT1296 Vass Derby - Black Calf - US 11.5 - R Last , Man's/Woman's Dunham Men's Captain - Choose SZ/Color Modern technology Highly praised and appreciated by the consumer audience Vintage tide shoesNike Flex Adapt TR Women's Running Training Shoes Wolf Grey/Black 831579 003Skechers Sport Womens Gratis-In Motion Fashion Sneaker- Pick SZ/Color.Nike Air Jordan 1 Retro Hi Premium Womens AH7389-107 Dipped White Gold Suede , NIKE Women's Wmns Air Zoom Fearless Flyknit , I35 Fedee Harness Strap Riding Boots 332, Black, 5 US

Jack Rogers Women's Maya Ankle Women's Bootie - SZ/Color Choose SZ Maya/Color 7db1bb3 - ishanyadance.com

This month, Arch Mortgage Insurance released their spring Housing and Mortgage Market Review. The report explained that an increase in mortgage rates and/or home prices would impact monthly payments this way:

  • A 5% increase in home prices increases payments by roughly 5%
  • A 1% rise in interest rates increases payments by roughly 13% or 14%

That begs the question…

What if both rates and prices increase as predicted?

The report revealed:

“If interest rates and home prices rise by year-end in the ballpark of what most analysts are forecasting, monthly mortgage payments on a new home purchase could increase another 10–15%. That would make 2018 one of the worst full-year deteriorations in affordability for the past 25 years.”

The percent increase in mortgage payments would negatively impact affordability. But, how would affordability then compare to historic norms?

Per the report:

“For the U.S. overall, even if affordability were to deteriorate as forecasted, affordability would still be reasonable by historic norms. That is because the percentage of pre-tax income needed to buy a typical home in 2019 would still be similar to the historical average during 1987–2004. Thus, nationally at least, even with higher rates and home prices, affordability will just revert to historical norms.”

What about home prices?

A decrease in affordability will cause some concern about home values. Won’t an increase in mortgage payments negatively impact the housing market? The report addressed this question:

“Even recent interest rate increases and higher taxes on some upper-income earners didn’t slow the market, as many had feared…Short of a war or stock market crash, housing markets could continue to surprise on the upside over the next few years.”

To this point, Arch Mortgage Insurance also revealed their Risk Index which estimates the probability of home prices being lower in two years. The index is based on factors such as regional unemployment rates, affordability, net migration, housing starts and the percentage of delinquent mortgages.

Below is a map depicting their projections (the darker the blue, the lower the probability of a price decrease):

“Short of a war or stock market crash…” | Simplifying The Market

Bottom Line

If interest rates and prices continue to rise as projected, the monthly mortgage payment on a home purchased a year from now will be dramatically more expensive than it would be today.

Real Estate News, , , ,
Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *