“Short of a war or stock market crash…” Demonia Kera-50 Women's Black Vegan Leather Buckle Wedge Boots - Gothic,Goth,PunBandolino Women's Viet Knee High Boot, Blk/Blk, Size 8.0DIOR MEN'S SHOES LEATHER TRAINERS SNEAKERS NEW BLACK B8FLadies Knee High Faux Leather Buckle Zipper Detail Elastic Low Heel Boots , Luxe Co. HUN Womens Boots Black 7 US / 5 UK , New Clarks Men ROCK WALK GTX DARK BROWN LEATHER / true 7Yosi Samra Women's Samara Soft Leather Flats, 2 Color Options , Natural Soul by Naturalizer~Navy Blue Suede slip-on 8m , Rosina Ferragamo Schiavone women's high heel shoes size 7 1/2 M unusedWomens Summer Mid Thick Wedge Stylish Strap Pumps Sport Sandals Shoes Clubwear , PLEASER Extreme Ankle Strap Buckle Platform Fetish High Heels BEYOND-089 Black , Vince Camuto Kanara Tie Up Dress Sandals 695, Black, 6 US / 36 EUMEN'S DAN POST 9.5 BLACK CHERRY 4318 COWBOY BOOTS VERY SOFT LEATHER , $700 New Santoni Mens Blue Shoes Size 6.5 US 5.5 EU , John Varvatos Mens Crosby Heritage Slip On Leather Loafers Sz 10 Brown Italy EUC , Stacy Adams Men's Vale Plain-Toe Formal-Tuxedo Slip-On Loafer - RedSalvatore Ferragamo mens Zagara black tassel captoe loafer dress shoes 9 B $580 , Skechers 15633 Performance Womens Go Walk Joy- Sneaker- Choose SZ/Color.New Allen Edmonds Berkshire 7 D black (3942)Reebok Women's Classic Harman Run Walking Shoe - Choose SZ/ColorBrooks Adrenaline GTS-14 Running Shoes White Fuchsia Midnight Navy / US 9D WIDE , Adidas Stella McCartney Women Barricade Clay Grey Tennis Shoe Size 10.5 NEW SALE , Men/Women Tretorn Women's NYLITE3BOLD Sneaker,Yellow, Size 8M Crazy price In short supply King of the crowd , balenciaga triple s size 6 6.5 7 7.5 8 8.5 9 9.5 10 10.5 11 11.5 12 12.5 13 , Skechers Sport D'Lites-Life Saver Women's Sneaker - Choose SZ/colorNEW WOMEN'S CRUSH DURANGO WESTERN PEEK A BOOT (RD5510) 7 MEDIUM $140 , Melissa Ankle Boot + Jeremy Scott (Moschino) DK ORANGE AUTHENTIC Shoes 7 NIB , FRYE VTG Black Label braided leather campus riding boots Sz 7.5 B BOHO HIPPIE , Hunter Women's 'Original Short' Dark Olive Green Boots Size 5 USFlamingo 1021 Black Patent Open Toe Clear 7" High Heel Platform Ankle Boot ,

NEW THE NORTH FACE 11/42 FACE Womens NORTH Sisque Waterproof Tall Boot US 11/42 Sepia Brown/Ivory 54dea62 - 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 *