“Short of a war or stock market crash…” Dansko Womens Delphina Ankle Bootie, Taupe Milled Nubuck, 42 EU/11.5-12 M USGentlemen/Ladies Skechers Women's Boots Black (Blk) High-quality In short supply Seasonal promotion , Men/Women Tod's XXW0MW0B181993C413S Loafers Women's Beige AU High grade New in stock Extreme speed logisticsBlack Womens Open Toe Sandals Patent Leather Stilettos High Heels Casual ShoesAntonio Melani Size 9 M ODETAH Black Patent Leather Heels Pumps New Womens ShoesWomen's Volatile Cafe Metallic Wedge Thong Sandals - Silver - US Size 9Christian Louboutin Bianca 140 Nude Patent Leather Platform Pumps 37.5 - $875 , Steve Madden Stecy Blush Patent Leather Ankle Strap Heels Sz 10 , Vince Sawyer Sandal ankle strap flat sandals us size 8/39 , Excellent ASICS GEL-Kayano 23 Light Grey Purple Pink Womens 8.5 40 EUR T696NNIKE AIR HUARACHE RUN 91' QS AH8049-001 BLACK PURPLE WHITE DS SIZE: 8.5 , 100% Auth NIKE AIR JORDAN AJF 5 Sz. 9 DS 3M AF-1 Fusion Rare23 Hypebeast 2008 , Men/Women MEN'S SHOES SNEAKERS NEW BALANCE [MSX90HTE] The color is very eye-catching The highest quality material Various latest designs , Johnston & Murphy Men's Garner Penny Loafer Black Full Grain Leather Loafers , Stacy Adams Men's Black Slip on Dress/Casual REGALIA loafers Shoes 24743-001 , Kenneth Cole Unlisted Men's Pat On The Back Slip-On Loafer - Choose SZ/ColorFashion Mens Casual Pointed Toe Pumps Nightclub Shiny Comfort Breathable ShoesMens Fashion Pointy Toe Stripe Slip On Lofers Youth Casual Business Leather Shoe , AUTH Salvatore Ferragamo Men Parigi Suede Loafer Shoes 8 , Porsche Design Cannes DL2 leather lacing shoes casual sneaker US 10 , Saucony Triumph Iso 2 Running Women's Shoes Size 5 , CLARKS DINAH PIXIE BLACK LEATHER 26119866 WOMENS US SIZESPUMA Tsugi Jun Women's White/Paradise Pink/Nebulas Blue 36705101Adidas Samoa + Womens Style : By3528 ICEPNK,ICEPNK,White Womens Size 6.5 , NIKE W Nike Air Zoom Structure 21 904701-400 ARMORY BLUE Size 9Nike Women's Air Max 95 Casual ShoeToni Pons Finley Multi Tapestry Print BootieWomen's Durango Crush Rock 'n Scroll Western Cowboy Boots RD5513 , OMG**BRAND NEW/NO BOX**LUCKY BRAND Cognac Genuine Suede Fringe Moccasin Boots*10 , EUC ASH black Pebbled Leather Biker Women's Boots w/2 Side Zippers sz.41

Nike 29285 LeBron X 9.5 (10) Blue Diamond - Size Size 9.5 (US) a6ce557 - 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 *