The typical Mortgage Payment rising Twice the Rate of Prices

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CoreLogic estimates  that nearly 10 percent gain in the buyers’ mortgage payments by july 2019. Homeowners might not want to wait any longer to invest in the property market.

 Today, buyers will have to spend about $1,400 more annually on their mortgage payments than they would have to spend a year ago. This shows that the mortgage rates have risen rapidly since the beginning of 2018. The U.S. median sales price has risen by close to 6 percent over the last year, meaning that the principle-and-interest mortgage payment on the median priced home has increased to about 13 percent. While CoreLogic home price index forecast suggests U.S. home prices will be up 4.3 percent year over year in july 2019, some mortgage rate forecasts indicate that the mortgage payments that the homebuyers will face then will have risen by more than twice as much.

There have been signs suggesting that the market may be shifting to favor the buyers, that doesn’t disqualify the fact that the prices for homes are still on the rise in many areas around the country. The median home sales price in July was $230,411 up 5.8 percent Y-O-Y.

The Typical Mortgage Payment

One way to measure the inflationary impact, mortgage rates and the home prices on affordability is by using the ‘typical mortgage payment.’ This is a mortgage-rate-adjusted monthly payment which is based on each month’s U.S. median home sales price. The typical mortgage payment is calculated using the Freddie Mac’s Average rate on a 30-year fixed rate mortgage with a 20 percent down payment. It doesn’t factor in the taxes or insurance.

Typical mortgage payment is a good proxy for affordability as it shows the monthly amount that a borrower would have to qualify for in order to get a mortgage to buy  the median-priced U.S. home.

According to the data by CoreLogic, the U.S median sale price for homes in July 2018 was $230,411 up 5.8 year over year and the typical mortgage payment rose 13.1 percent mainly because of the nearly 0.6 percentage point rise in mortgage rates over year. The mortgage rates are estimated to rise by about 0.43 percentage points between July 2018 and July 2019. It is also estimated that the median sales price is likely to rise 1.8 percent over the same period. The Power Is Now estimates that the typical monthly mortgage payments is likely to rise by almost $1000 by July 2019, representing a 7.0 percent year over year gain.


 There is no doubt that the monthly mortgage payments are on the rise, nonetheless, the payments are still very low by historical standards. The monthly payments over the next year are likely to be a burden to most people. It is happening now and you do not need to be an expert to feel it. If you do not want to suffer high payments in the near future, you need to get into the property market right now, you need to buy right now! The rates and home prices are rising meaning that it is time to take the hit and buy now.

For consultation about the property market and mortgage, feel free to book an appointment with me, or email me at or by telephone at 800-401-8994 Ext. 703.


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