“Short of a war or stock market crash…” Gorgeous Sam Edelman Park Harnes Boots black Leather Knee High US 6 WOW !DC COLE LITE S BLACK WHITE FREE POSTAGE AUSTRALIAN SELLER KINGPIN SKATE SUPPLY , Mr/Ms Ankle Boot Dr. Martens 460 Smooth Comfortable feeling First batch of customers professional designOLUKAI Miki Li Women's Walking/Water Comfort Shoe with Arch Support 7.5 B US,Pretty Ballerinas Womens Sz 38.5 / 8 Black Sparkle Bow Ballet Flats NICE!!Gentleman/Lady jeffrey campbell Fine workmanship new Contrary to the same paragraph , Man's/Woman's ZIGI SOHO Women's Candace Slide Pump the most convenient Win the praise of customers German Outlets$175 VIA SPIGA TARIN Cream Leather Designer Strappy Espadrille Wedge Sandals 8.5** Munro Layla Pump - Women's Size 5.5M Eggplant Purple , TRES BELLES CHAUSSURES DOLCE GABANNA T 37 FR , NEW Adidas Originals Top Ten Low TRIPLE WHITE LEATHER Men's Shoes C77113 , air jordan retro 4 IV “alternate 89” Red Size 10Air Jordan 4Lab1 677690 355 Size 11 Shoes Pre-Owned MensVNDS Air Jordan 7 VII Hare CDP, Size 12, YOTR, Yeezy, Royal, Bred, off white , 2017 DS Air Jordan 1 Retro Hi Flyknit Royal sz 10 black blue | TRUSTED SELLER!NEW BALANCE M1500 "FOOT PATROL" - ITEM 2-88 STYLE M1500FPKLucchese Men's Cowboy Buffalo Boots 1883 N9516.54 Distressed Antique BrownBlundstone Men's BL1316 Winter BootBlack/Red8.5 UK/9.5 M US , Men's Casual Loafers Driving Moccasins Oxfords Leather Shoes Comfort boat New Y1- 8549 Finn Comfort Mens Classic Sport Insole (UK ) M- Choose SZ/Color. , Handmade Men Leather Black Ankle Boot Men Ankle Boot Men Chelsea Boot Men Boot , Keds Kickstart Striped Mesh Women's White Size 10Skechers 14462 Performance Womens Go Step Lite- Walking Shoe- Choose SZ/Color.Nike Roshe One Womens 844994-001 Black Mesh Running Training Shoes Wmns Size 6.5 , CAMPER TOGETHER X BERNHARD WILLHELM HIMALAYAN sneakers SNAKESKIN /US7/UK4 , NIKE Womens Hyperdunk 2017 Tb 897813-401 GAME ROYAL Size 8EUC Vasque Breeze 2.0 GTX Gargoyle/African Violet Hiking Boots 8W Gore-texElegant Womens Suede Wedge Heels Ankle Boots Pointy Toes Fashion Party Shoes New , vtg Acme Faux Ostrich Grain Leather Ladies Western Cowgirl Boots 4D Girls Cowboy , Womens Leather Sexy Block High Heel Shoes Over Knee Thigh High Boots Shoes Size ,

Brand new Salvatore Ferragamo 511 Salvatore Brand women’s Leather oxford loafers, Size 8, Leather 998928a - 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 *