Price Increases Muting Interest Rate Affordability

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Posted To: MND NewsWire

Any benefits to affordability delivered by recent improvements in interest rates have been significantly downgraded or even erased by home price increases. Black Knight Financial Services said in its March Mortgage Monitor that the interest rate declines the country enjoyed during the first months of 2016 could have saved a homebuyer $44 per month on a mortgage used to purchase a median priced home. However, home price appreciation cut that back to just $18 per month. At the time the Monitor’s data was compiled, in March 2016, mortgages interest rates had fallen year-to-date by about 35 basis points. Black Knight used those lower rates to calculate principal and interest payments to determine how lower rates impacted affordability of an 80 percent loan-to-value (LTV) 30-year fixed rate mortgage…(read more)

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