“Short of a war or stock market crash…” Kelsi Dagger Brooklyn Women's Kline Ankle Boot , Jeffrey Campbell Easton Open Toe Bootie Black Patent New w/BoxNIKE MENS AIR FORCE 1 GREY BLACK SHOES **FREE POST AUSTRALIAara Womens ROM Hi-Top Trainers, Grau Elefant 11, 3 UKMAX KIBARDIN Designer Tan Leather Ankle Boots NEW $1300 ladies 37 , Franco Sarto Tula Buckle Espadrilles Sandals 761, Peach, 8.5 US / 38.5 EU , Man/Woman Slipper L'L'Autre Chose leather New product Upper material value , womens diamond crystal high-heeled slip on dream wedding dress formal shoes sizeMerrell Women's Jungle Mock Slip On ShoeB80-030 FitFlop Womens Loaff Clog - 8- Choose SZ/Color. , Bella Vita Women's Abi-Italy Slide Sandal Denim Fabric Slides , Gentle Souls Women's Ionela Slide Cerulean Suede SlidesSummer Pumps Slingbacks Flats Leather Womens Ladies Suare Toe Slip On Shoes Size , Nina Feyra Champagne Studded suede Wedding Prom Bridal Sexy 6.5M 6.5 M $99 NWB , Bordello Teeze 26 Cream and Red Faux Leather and Plaid Corset Stiletto 5.75 inchLUICHINY ~WOMEN'S HIGH HEELS~TURQUOISE~SUEDE UPPER~LEATHER INSOLE~SIZE 10M~NEWBadgley Mischka Embellished Sequin Heel Platform Peep Toe Pumps Women's Size 7MNEW London Trash CANDY Hot Pink Print Pony Hair Platform Heels Size 6.5 , BURBERRY BLACK PATENT TRIM NOVA CHECK STRAPPY WEDGE ESPADRILLES SIZE 39 , Gentlemen/Ladies Impo Temple Strappy Dress Sandals, Black Clearance price Optimal price VariousWomens Gold Patent Leather High Slim Heels Mules Slippers Sandals Stilettos C624NIKE VORTAK LAGOON PULSE VOLT GLOW BLACK ROSHE HUARACHE MENS SZ 8-13 AA2194-402NIKE ZOOM FLY NYC NEW YORK CITY BLACK WHITE SZ 8.5 MENS [AH5088 001]Nike Free RN 2018 DNA Mens AH7870-400 Blue Cobalt Citron Running Shoes Size 122018 Nike Air Jordan 1 Retro Shadow High OG Grey/Black 555088-013 Lot New DS2012 Nike Air Jordan 6/7 Retro GMP SZ 9 Golden Moment Pack Olympic DMP , Reebok Womens Classic Melody Ehsani Leather Ventilator Me Sneaker Sz. 11New Balance Women's Leather Walking #WW928WB3 White/Blue Medium (B) & 2E Wide , DIESEL Y01100 PS780 H3849 SHERUN Wmn's (M) Red/White Suede Lifestyle ShoesGentlemen/Ladies BEARPAW Women's Natalia Fashion Boot Packaging diversity low cost leading the fashion

Camper 29993 Kobo Camper Bootie Womens SZ/Color. Boot/- Choose SZ/Color. 088b942 - 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 *