“Short of a war or stock market crash…” Corral Women's Western Square Leather Toe Boots Sand Engraved Feathers C3276 , Puma Womens Vikky Platform Ribbon Bold Low-Top Sneakers Black, 7 UK , naturalizer Fae Flat Comfort Sandals, Porcelain Leather, 8 US / 38 EUBALLY Black Patent Leather Kitten Heels With Bow - Size 36.5EU (6US)Gudrun Sjoden Comfort Shoes Womens Size Hot Pink Fushia Polka Dot LeatherLadies Silk Satin Pointed Toe High Heels Bridal Stilettos Stylish Shoes Pumps Sz , Calvin Klein Heels size 8.5 Med - New with Box , Aerosoles Street Lamp Open-Toe Kitten Heels 841, Mid Red, 10.5 US , Chiarina Satin Studded Pumps by Monticello Shoes (Size 10) , Stuart Weitzman Red Patent Leather Heel Mary Jane Pumps 3" Block Heels 6.5Gentlemen/Ladies NEW MI/MAI WOMENS PUMP Excellent craft Attractive fashion cheaper , LOUBOUTIN ZENOBISSIMA 85 BLACK PLATIN LEATHER CAGED BUCKLES SANDALS PUMPS 36.5Marc Fisher Womens Meliza2 Fabric Open Toe Casual Ankle Strap Sandals , NIB CASADEI Black Leather Sandals 38US White Stones Buckle Closer Flat Heel , Brooks Maximus XT 9 Mens Crosstrainer (Leather) (D) (411) + Free Delivery (Aus) , Nike Free RN Motion FK 2018 Run Flyknit Olive Green Men Running Shoe 942840-200Gentleman/Lady jordan 6 maroon size 13 Elegant and sturdy set meal Optimal price Very practicalNike Air Max 95 iD White Grey SZ 10.5 ( 818592-993 )New! ADIDAS Jeremy Scott Stan Smith Asap Rocky Black Bones, Size 12, RARE!dr scholl's men shoes 401-hg suede Light brown US size 10 1/2 DMens classic Patent Leather Business pointed Toe slip on D0 Dress Formal ShoesNine West Womens Oleandro Low Top Slip On Fashion SneakersNew pair of VANS AUTHENTIC PLATFORM EMBOSSED CHALK PINK VN0A3AV8QB1 for women , NIKE Flyknit Lunar 1 Bright Raspberry Volt Yellow Wms 11 43Alegria by PG Lite Women's Vita Platform Slide Sugar Skulls PU Platform SandalsAdidas Womens Swift Run W Size 8 1/2 , New Women's ADIDAS Ultraboost 3.0 - S80682 - Black White Ultra Boost SneakeryGentlemen/Ladies DELIGHT-2021 Excellent value Ranked first in its class Popular recommendation , Ariat Fatbaby Western Boot - Brown - Womens , Camper Women's Black Leather Boot Size US 10.5// ,

Womens High High 22520 Heels Leather Strappy Sandals Gladaitor Open Toe Party Gothic Pumps Sandals 3d336c8 - 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 *