Priced Out: Where Higher Rates Could Hurt Home Buyers Most

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

Photograph by Huber/Sime/eStock

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Pain at 6%: Seattle

Monthly income devoted to mortgage bill:

• historic average: 25.2%

• at 6% interest rate: 27.9%

Seattle’s growing popularity and low housing inventory have produced a seller’s market, and prices here verge on the unaffordable. In the third quarter of 2013, the 21.8 percent of monthly income (median income is $68,237) going to the mortgage was well below the city’s historic average of 25.2 percent. Get to 6 percent mortgage rates and it’s a different story -- the mortgage eats up almost 28 percent of monthly income. The median home value here in 2013's third quarter was $306,000. Zillow expects that to rise 8.1 percent and reach $330,834 by September.