Mortgage payments are up year over year, outpacing home prices, according to the latest CoreLogic Home Price Index Forecast. According to the study, principal-and-interest mortgage payment on that median-priced home has increased more than 15 percent over the past year, while the U.S. median sale price has risen by just over 6 percent in that same time.
Additionally, CoreLogic predicts home prices to U.S. home prices will be up 4.7 percent year-over-year in June 2019, and the U.S. median sale price in June 2018 – $233,732 – was up 6.3 year over year, while the typical mortgage payment rose 15.1 percent because of a .67-percentage-point rise in mortgage rates over that one-year period.
According to the latest Primary Mortgage Market Survey from Freddie Mac, mortgage rates are up due to the “one two punch” of strong job and consumer credit growth,
“Mortgage rates are currently 0.82 percent higher than a year ago, which is the biggest year-over-year increase since May 2014,” said Sam Khater, Freddie Mac’s Chief Economist. “Looking ahead, annualized comparisons for mortgage applications may look weaker than they appear, but that’s primarily because of the large spread between mortgage rates now and last September, which was when they reached their low for the year.”
Added Khater, “Overall, this spectacular stretch of solid job gains and low unemployment should help keep homebuyer interest elevated. However, mortgage rates will likely also move up, as the Federal Reserve considers short-term rate hikes this month and at future meetings.”
Danielle Hale, Chief Economist for Realtor.com, also commented on Freddie mac’s data, noting that increasing rates may impact price growth.
“Looking forward, increasing mortgage rates will continue to erode home buying power and will undoubtedly contribute to a further slowdown in price growth,” said Hale. “We have already seen a tapering in August which saw a 7 percent increase in median listing prices, down from 10 percent a year ago.”