“Short of a war or stock market crash…” Franco Sarto Alfie Women's Suede Taupe Bootie Sz 10 2848 *New Dr. Martens Women's Womens Vonda Embroided 14 Eye Boot Rubber Soft BlackBirkenstock Amsterdam Womens Wool Felt Clog Sandals Moss Sandal Mules ShoesMan's/Woman's Valentino Rockstud Flat Very Rare Exclusive Special purchase Used in durability retail price , Quality Florsheim Leather upper / lining Ballet Flats Size 42. As NEW $179Nine West 25026529 Womens Raissa Fabric Ballet Flat- Choose SZ/Color. , 2018 Womens Lady Pointed Toe Suede Stilettos High Heels Pumps Wedding ShoesSexy Womens Hollow Strappy Pointy Toe Splice Shoes Pumps High Heel New Stiletto , $235 Badgley Mischka Kassabella II Gray Leather D'Orsay Sandals Womens Size 6 M*Neutral ARCHE from France Taupe Nubuck round toe pump with bow tie SZ , Aetrex Capri Cognac Quarter Strap Leather Sandal SC412 , Reef RF0A32XSWMC Womens Dreams Ii Flip-Flop- Choose SZ/Color.Womens Open Toe Genuine Leather High Block Heel Sandals Occident Shoes Sz , Man's/Woman's Jordan 1 Black Red Charming design Let our goods go to the world Different styles and stylesAsics Gel-Mai fuzeGEL Mens Womens Trainers Unisex Shoes White HN719 0101 U57NIKE Men's Zoom Shift TB Basketball Shoes Black White 897811 001 Size 7NIB $200 Cole Haan Men's Shoes Warren Apron Oxford in Brown leather sz 7.5 US , Men's Capezio K360 Character Oxford Shoe US 12.5M (fits like 11.5)NEW 580603 402 MEN'S JORDAN SON OF LOW SHOES !! NAVY BLUE/WHITE-WOLF GREY , Yves Saint Laurent YSL Tom Ford Johnny Boots Black Leather Men's Size 40.5Men’s Y3 Shoes - ( Size 9) , ADIDAS WOMEN'S STAN SMITH MID W SHOES SNEAKERS BLACK/WHITE US8.5Georgia Boot Women's GR3 Romeo , NIKE W Air Max 270 Flyknit AH6803-300 CLEAR EMERALD Size 9BASS-TIARA Women's Size 7 ShoeNew In Box Brown Ships N 24h , KOOKAI - BOTTES FEMININES ORIGINALES CUIR VELOURS MARRON & ROSE 40 - T. BON ETATFergalicious Crissy ankle boot bootie 3.75" heel black sz 6 Med NEW , Lucky Brand BOXER 2 Black Short Ankle Boots Women's - NEW , Red Nubuck El Naturalista Wedge Heel Ankle Boots 6.5 37 , Women's Western Cowgirl Cowboy Boot | Brown Cimmaron Round Toe by Silver Canyon ,

Corso Como Como Womens Benster Boot- Boot- Pick 29988 SZ/Color. 90af9e1 - 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 *