Higher Interest Rates Could Hit Some Homeowners Hard

interest rates and US counties

Mortgage rates, while down over the past two weeks, have trended higher since the election of President-elect Donald Trump.  In December, the Federal Reserve made its first and last interest rate hike for 2016, but left the industry with the notion that 3 more could be on the way for 2017.

For some, the rise in interest rates means higher profits for the first quarter of 2017, but for those looking to buy a home, it could mean higher payments or smaller homes. MarketWatch used data gathered from the National Association of Realtors (NAR) to show the top 5 counties where homebuyers will see the greatest change if interest rates increase to 5%, as NAR estimates they will over the next two years.  Here are the differences that an interest rate increase to 5% could cause on the payments of a median home price.

  1. Santa Clara, California,directly south of San Francisco
  • Monthly payment at 4.2%: $4,049
  • Monthly payment at 5%: $4,444
  • Difference: $396
  1. Nantucket, Massachusetts, an island off the coast of Massachusetts
  • Monthly payment at 4.2%: $4,306
  • Monthly payment at 5%: $4,727
  • Difference: $421
  1. Marin, California, directly north of San Francisco
  • Monthly payment at 4.2%: $4,404
  • Monthly payment at 5%: $4,834
  • Difference: $430
  1. San Mateo, California,Just south of San Francisco
  • Monthly payment at 4.2%: $4,458
  • Monthly payment at 5%: $4,893
  • Difference: $436
  1. San Francisco, California
  • Monthly payment at 4.2%: $4,573
  • Monthly payment at 5%: $5,020
  • Difference: $447

For the full MarketWatch report, click here.

Source:  HousingWire