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United States : Buying a Home Will be More Expensive this Spring.

Rising home prices and steadily increasing interest rates have pushed the average monthly mortgage payment up nearly 13 percent nationally over the past year, further challenging home buyers this spring, according to a new analysis released today by realtor.com, a leading online real estate destination.

U.S. home listing prices on realtor.com have increased 10 percent year over year; while interest rates on a 30-year fixed-rate mortgage have increased 28 basis points during the same time period, increasing the monthly mortgage payment of a median price home by an additional $168 a month.

A realtor.com analysis of the top 20 housing markets revealed monthly mortgage payments have increased dramatically in five markets, where home prices are rising faster than the national average. The monthly mortgage payment for a median priced home will increase an average of $449 in Seattle, $378 in San Francisco, $363 in Los Angeles, $242 in San Diego, $236 in Minneapolis and $213 in Atlanta.

"Buyers can expect to see more of their paychecks go to their mortgage payments this year," said Danielle Hale, chief economist for realtor.com. "Tight inventory has limited options for buyers and sent home prices soaring in many markets. Now, home buyers will also have to factor in higher mortgage rates."

"This spring's home buyers will have to decide: do they give up some desired home features to get into that lower price range, or do they dig deeper into their wallets?" she added.

Although rising interest rates play a role, Hale said, the majority of the payment increase can be attributed to the housing market's prolonged inventory shortage, which has pushed home prices above pre-recession levels in most markets. In the top 20 markets combined, 64 percent of the incremental payment increase is coming from a rise in prices and a shift toward more expensive homes, a dynamic that will further challenge first-time buyers.

"Despite mortgage rates still being historically low, the combination of higher prices and rising rates, will further challenge trade-up and first-time buyers, usually millennials or gen-'X'ers. They will have to borrow more money at a higher rate to close on a home in this market," Hale said.

[c] 2018 Al Bawaba (Albawaba.com) Provided by SyndiGate Media Inc. ( Syndigate.info ).

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Publication:Mena Report
Date:Mar 14, 2018
Words:376
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