“Short of a war or stock market crash…” Cole Haan Brown Suede Leather Knee High Womens 9 , Womens Ten Points Clarisse Chelsea Boots BLACK NUBUCK Boots , IVANKA TRUMP KYLIE Black Suede Designer Loafers Comfort 7.5 M , Troentorp Bastad Swedish Clogs: Ingrid, Coral Pink, Size 37Touch Ups Women's Cinnamon Heavy Multi Glitter Party ShoesLadies Liliana high heels --Size 7 1/2M , Gentlemen/Ladies Anne Klein Women's Nolita Sport Sandal Queensland Moderate cost a lot of varietiesNike Air Huarache Run Women's Shoes Igloo /Wolf Grey/White 634835-303 SZ 5.5 US , adidas outdoor Men's Terrex Climacool Boat Water Shoe, Collegiate Navy/Chalk 9 MNew Nike Hyperdunk 2015, Men's Size 12, White/Silver, 749561-100Nike Lebron 15 Diamond Turf Deion Sanders limited edition DS sz 11 retail priceJordan 8 Playoff Size 7.5 Not Asics, Adidas, New balance, Saucony *230 , MENS LACROSSE 467223 TALLGRASS WESTERN TOE LEATHER BOOTS NEW/BOX 10.5US 44.5EURBrand New Yeezy Boost 750 "Glow In The Dark" Athletic Fashion Sneakers [BB1840] , 21 DR. MARTENS Wilde Chelsea Cherry Red Leather Pull On Boots Size 10 12 , NIKE Men's Shoes 583178 Grey 24cmNew Dress Shoe Men Leather Slip on Flat Bowtie Business Casual Loafer Shoes B368 , Clarks Collection Men's Shoes Loafers Hamilton Way Brown Size10.5 NEW FREE SHIP!Nunn Bush Mens Bayside Venetian Slip-On Boat Shoe- Pick SZ/Color. , Faranzi Men's Black/Gold Fashionable Slip On Sneakers F41601 , Steven Land SL0044 Mens High Top Sneakers-TanMens Metal Slip On Pointed Toe Leather Splice Floral Low Top Dress Shoes Printed , Allen Edmonds Devonshire USA Apron Kiltie Dress Formal Loafers Men's US 12A , Women's Slip-On Sneakers Mesh Loafer Casual Beach Street Walking ShoesAdidas Originals Women's Tubular Shadow Off White Size 10Oxford Women Platform Real Leather Casual Strap Sport Sandal Mesh Shoes Creepers , New Vivobarefoot Primus Trail SG Womens Black/Red Minimalist Vegan TrainerYellow Box Womens Upon Leather Closed Toe Ankle Fashion Boots Taupe Size 11.0 , Fashion Women Suede zipper Round Toe Ankle Boots Inside Hidden Wedge Shoes BlackWomens High Heel Block Fashion Pointed Toe Ankle Boots Zipper Buckle Shoes News ,

Cole Cole Haan Elion Women's Elion Boot Boot - Choose SZ/Color 3faa244 - 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 *