“Short of a war or stock market crash…” Ladies Turquoise/Brown Leather Corral Cowgirl Boots Sz:9MNew Balance NB ML515RSA D Suede 2017 Classic Casual Lifestyle Shoes Grey/WhiteDanner Quarry USA 7IN GTX Boot - Women's , NEW VASQUE BREEZE 2.0 GTX WOMENS SHOE WATERPROOF HIKING TREKKING HIGH CUT US 9✨Rare ALEXANDER MCQUEEN Glitter Sneakers / Trainers / shoes 41 - 100% authenticMen's/Women's Caparros Givenchy Platform Dress Sandals, Eggshell Adequate supply and timely delivery Year-end sale Very good color , Ruby Shoo Rhea Rust Womens Heels Court ShoesAerosoles RETRO FIT Womens Retro Fit Slip-On Loafer- Choose SZ/Color.Women's NEW Earth Aspire Flats Shoe Size 8B Maroon Red Leather Negative Heel C11 , Alegria PG Lite Debra DEB 730 Shoes Primary Impression Sz 38/8M Comfort NurseVince Camuto Women's (Sz 8) Fenyia Block Heel Booties, Black, $149 (3587)BCBGeneration Fizzy Womens Cuoio Leather Open Toe Stacked Heel Sandals size 8.5 , Bally Women White Leather Open Toe Wooden Platform Wedge sandal Sz US 5 , Stunning Giuseppe Zanotti wedge sandals US 8.5 , GIORGIO ARMANI Black Leather Gray Fabric Ankle Strap Heels Pumps Size 39 $850 , Guilhermina Women’s Bechette Gold Leather Ankle Strap Heels Retail $140 size 10adidas PureBOOST X All Terrain Running Shoes, Women's Size 9.5, Navy/Red/MustardRebecca Minkoff Women's Jordan Platform Sandal - Choose SZ/ColorNike Lunar Superbad Pro TD Mid Mens Football Cleats 534994 Lions Blue Silver 15A753 Nike SB Koston Hypervulc 844447-318 Skate Shoes Size 8.5 New , Nike Air Zoom Mariah Flyknit Racer Mens Running Shoes Sz 9 [918264-401] , Skechers Men's Relaxed Fit Trannon Sneaker White SneakersMen's RED WING 'Weekender' Sand Leather Chukka Boots Size US 9.5 - DJulien David Mens Lt. Blue "Twins For Peace" High Top Sneaker Size 43 , Under Armour Charged Bandit -White / Afterburn / Blue Knight. Size: 6 Reg:$ 109. , NWB Women's Nike Flex Contact Running Shoes Sneakers Black Aqua JadeWomen's Nike Zoom Vapor 9 Tour Tennis Shoes Sneakers 543222-045 US Sz 9Nike Air Zoom Pegasus 33 Shield Wmn's Sizes 8.5,10.5 B Black/Slvr 849567-001 NEW , MOJO MOXY Womens LOLA Black Fringe Suede Heeled Tall Boot US 7.5M (849856067788) , Jessica Simpson Venni2 Platform Ankle Boots 486, Fierce Leopard, 5.5 US / 35.5 ,

LADIES 7308 SHOES/FOOTWEAR -Remonte red dorndorf 7308 shoe dorndorf red 7448ec1 - 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 *