Higher rates could raise housing costs 15 percent
If mortgage rate forecasts pan out, homebuyers might see their mortgage payments grow by 15 percent this year, according to a new analysis by CoreLogic. CoreLogic economists predict that mortgage rates will increase by about 0.85 percentage points between November 2017 and November 2018. The median sales price of a home is projected to increase 2.6 percent in real terms over that same period.
Based on that, CoreLogic researchers predict that the inflation-adjusted typical mortgage payment will increase from $804 in November 2017 to $910 by November 2018, a 13.3 percent year-over-year gain. In nominal terms, CoreLogic researchers say the typical mortgage payment’s year-over-year increase would be 15.5 percent.
As such, homebuyers could see a larger portion of their incomes devoted to mortgage payments.