The Wall Street Journal has an interesting article today entitled: Rise in rates is headwind for housing. The article noted that the national average rate has jumped to more than 5% and only three months ago it was at 4.17%.

How does this impact Boston condo buyers? A general rule of thumb holds that for every one-percentage point increase in mortgage interest rates raises home costs for buyers by about 10%.

If you’re a Boston condo buyer and you locked in on a rate  at 4.5%,  you would typically need an income of $84,000, assuming 10% down to qualify for a $400,000 30 year fixed-rate note.  If the rate jumps to 5.5% , the income requirement for the same loan would rise to $92,000.00.

One last point of interest, according to the Journal mortgage applications to purchase homes have fallen 12% in two months as rates have surged.

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