Borrowers paying extra 13% compared to last year

by Steve Randall14 Mar 2018

Average monthly mortgage payments have increased by almost 13% compared to a year ago.

An analysis from realtor.com has found that rising home prices and the interest rate hikes have increased monthly payments for the national median home price up by $138.

The figure is based on a 10% rise in US home listing prices on realtor.com and an interest rate rise of 28 basis points on a 30-year fixed-rate mortgage.

Buyers can expect to see more of their paychecks go to their mortgage payments this year," said Danielle Hale, chief economist for realtor.com®. "Tight inventory has limited options for buyers and sent home prices soaring in many markets. Now, home buyers will also have to factor in higher mortgage rates."

These markets have seen sharp increases in monthly payments
The national average payment hike is small when compared to the five markets where prices have risen the most.

Seattle homeowners can expect to pay an extra $449 for a median priced home while those in San Francisco face an extra $378 and Los Angeles borrowers need to find an extra $363.

Inventory shortage is a major factor in rising costs while in the top 20 markets combined, 64% of the incremental payment increase is coming from a rise in prices and a shift toward more expensive homes, a dynamic that will further challenge first-time buyers.

"Despite mortgage rates still being historically low, the combination of higher prices and rising rates, will further challenge trade-up and first-time buyers, usually millennials or gen-'X'ers. They will have to borrow more money at a higher rate to close on a home in this market," Hale said.

Year-Over-Year Difference in Mortgage Payments for the U.S. and Top 20 Largest Markets

 

Mortgage Payment Difference

YOY

Mortgage Payment Increase

YOY

Monthly Payment Feb. 2018

Monthly Payment Feb. 2017

2018 Med HH Inc

Median Listing Price Feb 2018

United States

$168

12.7%

$1,486

$1,318

$61,045

$274,900

Seattle

$449

19.2%

$2,792

$2,343

$82,186

$527,470

San Francisco

$378

8.6%

$4,754

$4,375

$97,974

$899,000

Los Angeles

$363

10.5%

$3,828

$3,465

$69,330

$723,972

San Diego

$242

7.3%

$3,567

$3,324

$73,550

$674,489

Minneapolis

$236

13.6%

$1,970

$1,734

$76,791

$361,950

Atlanta

$213

15.4%

$1,596

$1,383

$65,167

$307,493

Riverside

$152

8.2%

$2,004

$1,852

$62,190

$379,000

Phoenix

$144

9.3%

$1,689

$1,545

$60,641

$332,000

Miami

$132

6.8%

$2,083

$1,950

$55,037

$385,000

Denver

$130

5.0%

$2,746

$2,616

$75,489

$543,000

Chicago

$126

8.4%

$1,626

$1,500

$69,911

$282,447

Houston

$113

6.0%

$1,974

$1,861

$67,225

$321,396

St. Louis

$106

11.7%

$1,009

$903

$62,531

$189,900

Philadelphia

$101

8.0%

$1,367

$1,266

$70,516

$236,200

Detroit

$98

9.6%

$1,121

$1,023

$60,060

$204,500

Boston

$97

3.7%

$2,702

$2,605

$85,974

$499,900

Dallas

$94

4.6%

$2,149

$2,055

$68,128

$349,900

Baltimore

$92

6.4%

$1,530

$1,438

$77,704

$285,500

Tampa

$82

6.1%

$1,422

$1,340

$53,358

$262,823

Washington D.C.

$31

1.5%

$2,171

$2,140

$99,400

$424,950


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