“Short of a war or stock market crash…” Ladies Durango Boots-Accessorized Western Fashion, Style DCRD145Man/Woman Geox Women's Glynna 3 Winter Boot feature buy German OutletsNEW FREE PEOPLE AS 98 NOCTURNE BLACK LEATHER KNEE HIGH BOOTS US 10NIKE MENS AIR MAX PLUS WHITE WHITE BLACK SHOES **BEST SELLER , * NEW * Asics Gel Kayano 22 Womens Running Shoe (B) (0697)New Balance NB WRT300SB D Leather Classic Casual Lifestyle Shoes White/WhiteMen's/Women's Birkenstock Papillio Gizeh Texile Floral Bouquet Reasonable price modern Elegant and solemnGentleman/Lady Pleaser Day & Night DELUXE-636 Online Shopping Latest styles List of explosions , Dr. Martens Women's 1461 W Brook 2-Tie Shoe Black Polished Smooth Retail $130! , NEW IN BOX Gommino Driving Shoe By Tod’s Loafers 7EU RRP Shoe Trees , Man/Woman Not Rated Women's Timor Fashion Sneaker feature Cheaper than the price Perfect processingVANELi Vaneli Womens Petal Pump (B)- Pick SZ/Color. , Prada Authentic Womens Shoes Size 39 9 Black Pumps Peep Toe Patent Leather Heels , NEW MARC BY MARC JACOBS BLACK LEATHER SHOES SIZE 6 1/2 OR 7 1/2 IN FANCY INSOLES , Asics Men's Gel-Excite 4 Running Shoes Blue/Silver/Black , Mens Adidas Originals Tubular Runner Primeknit Shoes Size 14 Blue Spirit , Vans Chima Estate Pro Suede Black White Men's 12 Skate Shoes New SkaterNike Air Force 1 '07 AA4083-010 Wolf Grey/Wolf Grey-White Men's Size 13 , Nike Jordan Men's Jordan Grind 2 Training Shoe , Reebok Floatride 6000 Ultraknit White Men Running Shoes Sneakers CN2230 , NEW IN BOX Nike for J.Crew Killshot 2 RARE Sz 9 11 11.5 jcrew , PHARREL WILLIAMS X ADIDAS SOLAR HU GLIDE (White - SIZE 11.5)NIKE AIR JORDAN 5 RETRO V HORNETS PRE-GRAPE sz 9 W/Receipt , New Mezlan Campi 16 M tan/camel (2021)NIB RARE Missoni Converse Shoes Sneakers - Lucky Stone Multicolor Chevron US 8.0 , ASICS Gel Indicate - Blue - Womens , New FILA Womens THE CAGE FS1HTA3172X BLACK / RED US W 6-10 UNISEX SIZE TAKSEUnisa Womens unpiera Fabric Round Toe Ankle Fashion Boots taupe Size 8.5 Xw8rMr/Ms NEW BCBGENERATION DREYA BOOTIE economic buy Simple , Women's Knee High Boots Buckle Retro Heels Luxury Shoes Plus SZ US 4-11.5 Chic ,

Palladium Boot, Womens Pampa Chukka Hi Knit Lp Sue Chukka Boot, Brown Brown Sugar/Slate Black, 6 M 532df71 - 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 *