Priced Out: Where Higher Rates Could Hurt Home Buyers Most

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

Photograph by Ty Wright/Bloomberg

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Pain at 6%: Miami

Monthly income devoted to mortgage bill:

• historic average: 19%

• at 6% interest rate: 21.5%

A flood of overseas interest has created a luxury condominium boom in Miami and is inflating prices in the area. A jump to a 5 percent mortgage rate leaves Miami affordable by the city’s historic average -- city dwellers would pay 19.2 percent of monthly income to their lenders. It’s when mortgage raise hit 6 percent that the costs of homeownership rise well above the city’s average. Home appreciation isn’t expected to be great over the next year – Zillow projects a 2.1 percent increase to bring the median home value to $176,449 by September. The median income is $47,328.

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