“Short of a war or stock market crash…” Womens MARC BY MARC JACOBS uniform black white oxford booties sz. 35.5 , MENS ADIDAS PREDATOR FIRM GROUND MEN'S FOOTBALL BOOTS SHOESDr. Martens 1460 Patent I, Girls Ankle Boots, Pink Hot Pink Patent Lamper 670 , Amalfi by Rangoni Women's Emiro Flat, Dark Taupe, 8.5 M US , Wittner Buddy Brown Bootie Size 37 - Brand NewSchutz 317400010994 Womens Point Toe Flat- Choose SZ/Color. , NEW RENE CAOVILLA WOMENS EMBELLISHED Platinum Kid Stones 40.5 10.5 , Mr/Ms Heel Nine West Rylatt Natural Suede New varieties are launched Clearance Strong heat and heat resistanceBCBGeneration BCBG Size 6 M TREASURE Pumps Heels New Womens ShoesGentlemen/Ladies Pleaser Pink Label QUEEN-02 Practical and economical Upper material Export , S-554518 New Christian Louboutin Billy 120 Blue Pump Size US 9.5/marked 39.5New Balance Womens 696 Clean Composite Pack Lifestyle SneakerB- Pick SZ/Color. , $2850 FENDI WOMENS WHITE Wedge SANDAL TOE T-Strap LEATHER HEELS SHOES 40.5 10.5Bryr Size 37 Silver Metalic Leather High Heel Clogs Shoes For Women Made In USA , Nike Trainer SC Manny Pacquiao Size 11.5 New , Dunham Men's Exeter Low Brown Full Grain Leather , Nike Air Force 1 x PSNY High Black Size 9 NewMen's Black / Brown Leather Old West Squared Toe Cowboy Boots Sz:7 (AD)MERRELL MENS SHOES JUNGLE AYERS MOC BLACK SIZE 14 , Gentlemen/Ladies SYMBOL B CUIR COGNAC Easy to use Stylish and charming SimpleSize 9.5 Magnanni Rafa II Black Lather Silver Metal Bit Slip On Loafer $325Stacy Adams Men's Navy Suede Newcomb Slip On Loafer Shoe , New Balance Women's WSD400V2 Sprint Spike Shoe,Pink/Blue,11 B US , Nike Flare Lg QS AJ1 Jordan Serena Williams Black Red 878458 023 Tennis SZ 9.5 , The Trainer Hi Fenty by Rihanna Puma 190398-04 Whisper White Sneaker 8.5Nina Women's Inamae Ankle Bootie, Fy-Black, 7.5 M US , Women Chunky Heel Mid Calf Boots Metal Decor Pull On Patent Leather Casual ShoesMadden Girl Womens Cinder Fabric Almond Toe Over Knee, Black Fabric, Size 7.5 rt , Columbia Women's Boots Bugaboot Omni-Tech Winter 200gm Insulation Gray Size 6.5Nine West MAVIRA Women's Black Suede Leather Knee High Boots Size 7.5 M NWB

Calvin Calvin Klein Ramona Wedge T-Strap Wedge Sandals 702, New EU Caramel, 8.5 US/ 38.5 EU 7684136 - 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 *