Why Are Mortgage Payment Amounts Rising 3 Times Faster Than Home Prices?

Posted To: MND NewsWire

While the median price of a home sold nationally increased more than 5 percent over the 12 months ended in October, the monthly payment on that home went up by more than three times as much. That's the bad news. The good news is, that may be as bad as it gets. Andrew LePage writes in the CoreLogic Insights blog that the median price of a home sold in October 2018 was $218,733, a 5.2 percent annual increase. Over that same period mortgage interest rates rose by 0.9 percentage point. This magnified the home price appreciation and led to a 17 percent increase in the principal and interest payment on that home. However, LePage said that forecasts for both home prices and mortgage rates indicate a much slower increase in mortgage payments this year, probably closer to 7 percent. The CoreLogic Home...(read more)

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from Mortgage News Daily http://bit.ly/2SiaJsS