A week after the release of the Housing Price Index for the last quarter of 2016,  the median home price per county[1] has been updated. Applying the price change in the related metropolitan areas, it seems that, compared to a year earlier, home prices continue to rise in 97 percent of the counties. Counties in the following metro areas experienced price gains higher than 11%:

  • Palm Bay-Melbourne-Titusville, FL
  • Lewiston-Auburn, ME
  • Seattle-Bellevue-Everett, WA
  • Portland-Vancouver-Hillsboro, OR-WA
  • Crestview-Fort Walton Beach-Destin, FL
  • Tampa-St. Petersburg-Clearwater, FL
  • Jacksonville, FL
  • Salem, OR

At the same time, mortgage rates continue to rise. Based on Freddie Mac data, the average rate for a 30-year fixed mortgage was 4.17 percent in February. Since the 2016 elections, the typical mortgage rate has risen from 3.5 percent to 4.2 percent. Mortgage rates are still historically low, but crossing over from the 3 percent range to 4 percent range raises worries to potential home buyers.

The monthly payment was calculated by county based on the mortgage rate in October (3.5 percent), the rate as of early January (4.2 percent) and a higher rate likely to be seen within the next two years (5.0 percent).

Nationwide, it is estimated that the rise of mortgage rates from 3.5 to 4.2 percent increased the monthly payment by $75 to the amount of $921 while a rise from 4.2 to 5.0 percent will increase the monthly payments by $90[2] ($1,011 per month).

But the effect depends on the location. At the high end, San Francisco homebuyers have seen a nearly $377 increase in monthly payments so far, and if rates were even higher now, financing the same-priced home would cost an extra $451 per month.  At the low end, in Cochran County, TX, home buyers are paying an extra $13 per month on account of the mortgage rate rise since November, and they could see an extra $16 per month as rates rise to 5 percent. At this end of the spectrum, the change in monthly payments seems much more manageable.

However, these examples only use the current price of homes to see the difference.  In the years ahead, NAR expects that the 30 year fixed-rate will increase to 4.4 percent in 2017 and 5.0 percent in 2018 while home prices are expected to rise 4.2 and 3.1 percent, accordingly. Rising prices in addition to rising mortgage rates will push the monthly cost of housing up even higher for new homebuyers. Existing homeowners who took out fixed rate mortgages will have the same monthly principal and interest payment.

Select a County from the dropdown and see how much monthly payments change over the different mortgage rates:

Payment-County-Q42016

Lastly, please take look at which counties will be affect mostly from the increase of mortgages rates:

Top10-Q42016

 

For more information on data by name or price, and the methodology, please visit the data page. 

 

[1] There is data available for 3,119 counties.

[2] The U.S. median home value matches the county prices calculations. For comparisons purposes, the calculated median home value reflects all homes while NAR’s U.S. median price represents home sales. Thus, the calculated price ($209,227) is expected to be lower than NAR’s home value ($233,900 in Q4 2016). Please see Methodology for more details.

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