Priced Out: Where Higher Rates Could Hurt Home Buyers Most

By Suzanne Woolley - 2014-01-09T16:47:41Z

Photograph by Ocean/Corbis

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Pain at 6%: Phoenix

Monthly income devoted to mortgage bill:

• historic average: 20.2%

• at 6% interest rate: 21.9%

Housing demand from retirees is up, and inventory in Phoenix has struggled to keep pace. The mortgage bill here has eaten up an average of 20.2 percent of a resident’s monthly income historically. If mortgage rates rise to 6 percent, it will take 21.9 percent of income to pay the mortgage bill. The median home value here is expected to rise 9 percent by the end of the third quarter, to $201,381. The median income is $52,905.