Home buyers along coastal housing markets are being impacted the most by rising mortgage rates over the past few weeks, according to an analysis by the National Association of REALTORS®.
The average 30-year fixed-rate mortgage went up from 3.5 percent in November to about 4.12 percent in January.
Home buyers in San Francisco County, Calif., have felt the pain of that jump the most, with nearly a $375 increase to their average monthly mortgage payments, according ton NAR’s analysis. Other markets that are seeing costs rise the most are San Mateo County, Calif.; Nantucket County, Mass.; New York County, N.Y.; and Teton County, Wyo.
Housing costs in expensive coastal markets are seeing a rapid increase in prices, due to limited housing supplies mixed with a high demand from buyers as the job markets pick up.
“Unless you have unlimited funds, every little tick up in the interest rate lets you buy less and takes people out of the market if they’re struggling to buy their first home,” says Jeff Barnett, a real estate professional in Silicon Valley, told The Wall Street Journal.
But not all places are feeling the impact of rising mortgage rates by as much. For example, NAR’s analysis shows that Cochran County, Texas, is seeing the smallest impact from rising mortgage rates. Since the rate increases, mortgage payments have gone up just $13 a month there.
NAR is predicting further rate hikes on the horizon. They expect mortgage rates to increase to 4.4 percent by the end of 2017 and 4.8 percent in 2018.
Source: “Mortgage-Rate Rise Hits Coastal Property Markets Hardest,” The Wall Street Journal (Jan. 18, 2017)
